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Archive for the ‘Small Business’ Category

Bankrupcy on the Rise

Posted by iBlog on May 13, 2008

More businesses filed for bankruptcy in April, 2008, than in any month since new bankruptcy laws took effect in 2005, according to a company that tracks federal court filings.

The numbers show a 49% increase in commercial bankruptcies over last year, with an average of 235 daily filings last month compared to 158 in April, 2007, according to data compiled by Jupiter eSources, an Oklahoma City company that runs a database called Automated Access to Court Electronic Records(AACER). More than 5,000 firms filed for bankruptcy in April, 2008, the most in any month since the new laws took effect in 2005.

That leap in bankruptcy filings shows the troubles that started with sub-prime mortgages and other financial instruments on Wall Street have hit home for small businesses, according to one economist. “Last year was too early to really see the problem for normal-type firms. The only people having trouble last year were hedge funds and big banks in New York City,” says William Dunkelberg, chief economist at the National Federation of Independent Businesses (NFIB). He adds that companies that survived at the margins in good times are likely to be wiped out during a downturn: “Recessions always used to clean up the inefficient firms, and that’s what we’re seeing.”

A combination of tighter credit, higher commodity prices, and stagnant sales likely accounts for the rise in bankruptcies, experts said. Builders and other businesses tied to the housing market likely account for many filings.

Turning to Out of Court Resolutions

It’s unclear how much bankruptcies reflect the overall rate of business failure (BusinessWeek.com, 1/23/08). “Increasingly, businesses over the last 10 years have been turning to out-of-court resolutions for resolving financial distress,” says Robert Lawless, a bankruptcy law expert at the University of Illinois College of Law. Companies that have no creditors simply close their doors and are not recorded in the statistics.

AACER records any bankruptcy filed with a taxpayer identification number or a “doing business as” name instead of a Social Security number as a commercial filing, according to Mike Bickford, the firm’s president. Those filings include many sole proprietors whose bankuptcies would not be counted as commercial filings under official government records, he says.

Some of those unincorporated businesses—sole proprietors running home-based businesses, for example—may be victims of tighter consumer credit. “Those people don’t rely on bank loans. They’re using their credit cards, they’re using home equity lines of credit,” says Lawless, who writes about bankruptcy on the blog Credit Slips. Banks loans are tougher to come by as well. A Federal Reserve survey of senior loan officers at 56 banks showed that more than half raised lending standards for small business borrowers during the first quarter of 2008.

Rising Prices Are Real Culprit

The filings also reflect a shakeout in the housing market. “The number of new builders that opened up shop [in markets like Florida] was huge,” says the NFIB’s Dunkelberg. “A disproportionate number of these bankruptcies are going to be builders or companies closely tied to the housing market.”

Dunkelberg disputes that tight credit has hit small companies; he says rising prices are the real culprit. The share of business owners who listed inflation as their top concern rose to 12% in March compared with 4% the previous year, according to the NFIB’s monthly membership survey. Only 2% listed financing and interest rates. “There’s still no credit problem on Main Street, but there is an inflation problem,” Dunkelberg says.

As rising costs put pressure on margins, many businesses have seen their revenue fall as well. “I’m seeing contraction of the sales,” says Cathy Moran, a bankruptcy attorney in Mountain View, Calif., who works mostly with small businesses and consumers. Moran says she has handled recent cases for two construction companies and an engineering firm, along with non-housing related businesses like bike shops and spas. Business failure had been the prime reason clients came to her until about four months ago. “Now it’s kind of tipped the other way, so that more often than not bad mortgage loans are the driving force,” she says.

Tozzi covers small business for BusinessWeek Online


Posted in Current News, Entrepreneurship, Small Business | 1 Comment »

The Secrets Of Serial Success

Posted by iBlog on September 12, 2007

Five years ago, Tom Scott and Tom First realized they would never have to work again. Friends from college, the pair had launched a juice brand called Nantucket Nectars from the back of their island boat and catapulted themselves — the self-dubbed “juice guys” — into the stuff of entrepreneurial legend as their beverage took off nationwide.

Read the full article in WSJ

Posted in Entrepreneurship, Small Business | Leave a Comment »

Business Organization In Thailand

Posted by iBlog on August 21, 2007

Basic Business Organization

By Ekkapon Yuangnark

There are many kinds of business organization for person who would like to do business in Thailand. However, the basic and most favorable are as followings:

1. Sole Proprietorship :

The Sole Proprietorship is an unincorporated business owned by one person. All the proprietor’s assets, both business and personal, are subject to attachment or other legal action which may be brought with respect to the business.

2. Partnership :

According to Thai law, there are three different types of partnership. They are (1) unregistered ordinary partnership, (2) registered ordinary partnership, and (3) limited partnership. A joint venture or consortium is deemed as kind of unregistered ordinary partnership but may be treated differently under the Revenue Code.

(A) Unregistered Ordinary Partnership

An unregistered ordinary partnership is one in which all partners are, without limit, jointly liable for all the obligations and debts of the partnership. The partnership cannot be regarded as a juristic entity separate from each partner, who must make a contribution in the form of money, properties or services.

(B) Registered Ordinary Partnership

If an ordinary partnership is registered, it becomes a separate juristic entity from each partner, who thereby gains the following advantages:

(1) The assets of the partnership have to be examined before creditors can claim debt payment from the partners. This is unlike an unregistered ordinary partnership, in which each partner is directly liable for debts incurred by the partnership.
(2) The liability of a partner for debts incurred is limited to two years from the date he ceased to be a member.

(A) Limited Partnership

(1) A limited partnership consists of two types of partner:
(a) one whose liability is limited to the specific amount which he has contributed to the partnership, and
(b) one whose has unlimited liability for all debts incurred by the partnership.
(2) A limited partnership must be registered and is regarded as a separate entity.
(3) It should only be managed by a partner who has unlimited liability.
(4) If the business of the partnership is managed by a partner whose liability is limited, that partner will become unlimitedly liable for all debts incurred by the partnership.
(5) Partners with limited liability are entitled to carry on business of the same nature as that of the partnership and are free to transfer their shares without prior consent of the other partners.
(6) Creditors of the partnership are not entitled to sue partners with limited liability unless the partnership is dissolved. Even then, creditor can claim only the following amounts:
(i) part of the undelivered contribution,
(ii) part of the contribution which has been withdrawn,
(iii) divined or interest received in bad faith or contrary to the law.
(7) New partners cannot be introduced into the partnership without the consent of all other partners. A new partner is liable for any of the partnership’s debts from time of his becoming a partner. Similarly, an ex-partner is liable for debts incurred by the partnership up to the termination of his right as a partner.

An ordinary partnership is dissolved if :

(i) Terms of contract of partnership provide for it.
(ii) A definite period of time descried in the terms of partnership has expired.
(iii) The partnership was formed for a single undertaking, which has been completed.
(iv) Any of the partners gives due notice to the others
(v) Upon death, bankruptcy or incapacity of a partner.
In (iv) and (v) above, the partnership can continue to exist if the remaining partners buy the shares of the withdrawing partner.

An agreement on how the profits and losses of the partnership are to be divided should be made between the partners of the partnership. In the event that no such agreement has been made, each partner’s share in the profits and losses will be calculated in accordance with the proportion of his contribution.

The partner should also make an agreement concerning the manner in which the business of the partnership should be managed. In the absence of such an agreement, the business of the partnership may be managed by each of the partners, who are jointly responsible for the acts of any other partner in the ordinary course of business. Relations between the managing partners and the other partners are governed by the laws of agency.

Unless consent is given by other partners, each partner is prohibited from carrying on any competitive business of the same nature as that of the partnership. If this does occur, the other partners are entitled to claim back any profits made, and/or compensation for any injury suffered by the partnership in consequence.

If the partnership is dissolved, liquidation shall take place unless ;

(a) some other method of property adjustment has been agreed upon by the partners,
(b) The partnership is adjudicated bankrupt.

Liquidation of a partnership must be done in accordance with the following procedure:

(i) Repayment of debts to third party.
(ii) Reimbursement of advances made and expenses incurred to the partners in managing the business of the partnership.
(iii) Return of each partner contribution.
(iv) Division of any remaining balance between the partners, as profit.

3. Limited Company :

Under Thai law, there are two types of limited companies, private company and public company. In this brief shall mention to private company only.

Limited company is a company which is formed with a capital divided into equal shares. The advantage of conducting business in the form of a limited company is that people can participate in large-scale business activities with their liability being limited to the amount unpaid on the shares held by them.

The procedure for forming a limited private company is as follows:

(1) The promoters of the company must file a memorandum of association. The memorandum of association shall contain the following information:
– the full name and intended location of the company,
– the objectives of the company,
– the intended location of the head office of the company,
– a declaration of the shareholder’s limited liability,
– the amount of share capital, and the value of each share,
– the name, address, occupation, and signature of each of the promoters together with the number of shares subscribed to by each.
(2) The official in charge of company registration will review the memorandum of association, especially the company objectives, to determine whether it is (a) against the law, or (b) detrimental to public morals. Once satisfied, registration will be granted.
(3) After registration, the company promoters will try to have all shares subscribed to. A private company is not permit to invite the public to subscribe to the shares.
(4) After all shares have been subscribed to, the promoters of the company must immediately call a general meeting of subscribers. This meeting is the statutory meeting, which should call :
(a) adoption of the company regulations,
(b) rectification of any transactions or expenses made by the company promoters during the formation of the company,
(c) determining and fixing the amount to be paid to promoters,
(d) fixing the number of preference shares, if any,
(e) fixing the number of ordinary and preference shares to be allocated as fully or partly paid up in place of money, and determining the amount at which they shall be considered as paid up, and
(f) appointment of directors and auditors and establishment of their respective power.
(5) After the statutory meeting, the promoters shall hand the business over to the directors.
(6) The directors shall cause the promoters and subscribers to pay up each share in money at an amount of not less than twenty-five prevent of the par value.
(7) When the above mentioned amount has been paid, and within three months of the statutory meeting, the directors must apply for registration of the company.

Regulation of the Company :
Shareholders will normally adopt company registrations. These regulations will be registered. They are deemed as the law governing the company’s business and binding the director, shareholders and outsiders in accordance with the company’s resolutions which require approval of the shareholders.

Management of the Company’s Business :
The company’s business is to be managed by the directors of the company as appointed at the meeting of the shareholders. The first group of directors are appointed at the statutory meeting and thereafter at the ordinary meetings. The directors have to manage the company’s business in accordance with the regulations passed at the first general meeting of shareholders. The regulations will usually specify which director(s) are to conduct transactions with outsiders. However, if other directors have an agency relationship with the company, they may conduct transactions which bind the company to outsiders. In this case, these directors will also be responsible to the company and the shareholders.

Although the directors have the authority to conduct all types of legitimate business on behalf of the company, there are some things for which they must obtain the approval of the shareholders at the shareholder’s meeting. These are :
(1) appointment and removal of directors(s),
(2) appointment of auditor(s),
(3) declaration regarding distribution of dividends,
(4) conducting business involving capital, fully or partly paid up in any form other than money,
(5) dissolution of the company,
(6) amalgamation with other company(ies),
(7) other matters recorded in the regulations of the Company.

4. Joint Venture :

A contractual unincorporated joint venture or consortium is not recognized as a unique legal entity under the Civil and Commercial Code, except, perhaps as a form of partnership, but these forms of organization are recognized under the Revenue Code.

5. Branches of Foreign Company :

There is no special requirement for foreign company to register its branch in order to do business in Thailand. However, most businesses fall within the scope of one or more laws or regulations which require a registration, either before or after commencement of activities and foreign business must follow the generally applicable procedures.

6. Representative Office :

By a regulation of the Prime Minister’s Office, special procedures were establishes for those companies that wish to establish branches in Thailand to engage in limited “non-trading” activities. These procedures are optional but may be beneficial in certain circumstances. If the business activities of a foreign company are limited to the search for Thai products to be exported to other organs of the company or to do quality control work associated with such purchase or to engage in market survey activities, it is recommended to register as representative office. If a company is accepted for this representative office, expedited visas and wok permits for up to two foreigners to work in the branch are available.

Posted in Articles By Author, Asia Business, Business Tactics, China Global, Consulting, Corporate Strategy, Entrepreneurship, Going Global, Hiring & Training, Innovation, International Business, Management, Researching, Small Business | Leave a Comment »

Business Plans With Legs

Posted by iBlog on August 20, 2007

Chief executives of 53 fast-growing companies rated their business plans 4.3 out of a maximum six in helping them obtain outside funding, according to a recent study by two professors at Weber State University in Ogden, Utah. More significantly, the CEOs rated their plans 4.1 in helping them manage their companies. “This strong rating indicates that small successful companies continue to use their plan for more than funding,” say the professors, Anthony Allred and H. Lon Addams, in an article published in the Journal of Small Business Strategy.

Read the full article in BusinessWeek.com

Posted in Business Tactics, Entrepreneurship, Small Business, Start Ups 101 | Leave a Comment »

Small Business Communication Tools

Posted by iBlog on August 9, 2007

Working with clients across great distances, Steve Bridges needed a better way to exchange information and collaborate on projects. E-mailing large documents wasn’t efficient. Inboxes got filled up or, worse, documents got overlooked. To remedy his situation, Bridges, IT manager for advertising firm La Agencia de Orci, decided to employ an extranet.

Read the full article on Fastcompany.com

Posted in Digital Media, Entrepreneurship, Small Business, Start Ups 101, Technology | Leave a Comment »

Virtual Trade Shows Take Care of Business

Posted by iBlog on August 9, 2007

Virtual trade shows, expos and conventions are coming into their own. While event producers all insist that virtual shows won’t replace real-world shows, there are some decided advantages to attending, hosting or exhibiting at online events. Entrepreneurs save on the costs of travel, booth materials and employees’ lost productivity.

Read the full article in Entrepreneur Online

Posted in Advertising, Innovation, Sales & Marketing, Schmoozing, Small Business, Start Ups 101, Technology, Trends & Ideas | Leave a Comment »

Powersell on eBay

Posted by iBlog on August 9, 2007

To get the most from your eBay business, make sure you’re using the “triangle of success”: eBay auctions, an eBay Store (read my previous column on eBay Stores) and a website. eBay Power-Seller and 47-year-old website owner Yaron Hankin (www.anytimesale.com) says, “People look at someone who not only sells on eBay, but also has his or her own website, as a more established seller.”

Read the full article in Entrepreneur.com

Posted in Entrepreneurship, Online Retail, Retail Market, Sales & Marketing, Small Business, Start Ups 101 | 1 Comment »

How To Play To Your Strengths

Posted by iBlog on August 9, 2007

Most feedback accentuates the negative. During formal employee evaluations, discussions invariably focus on “opportunities for improvement,” even if the overall evaluation is laudatory. Informally, the sting of criticism lasts longer than the balm of praise. Multiple studies have shown that people pay keen attention to negative information. For example, when asked to recall important emotional events, people remember four negative memories for every positive one. No wonder most executives give and receive performance reviews with all the enthusiasm of a child on the way to the dentist.

Read the full article in Harvard Business Online

Posted in Business Psychology, Business Tactics, Entrepreneurship, Leadership, Management, Small Business, Talent Development | Leave a Comment »

Going Global With Your Small Business

Posted by iBlog on August 9, 2007

Has your small business gone global yet? In an increasingly wired world, adding an international dimension – whether through importing, exporting, outsourcing, manufacturing overseas, or forming a strategic partnership – is now the province of both mom and pop ventures and large conglomerates. It is becoming almost as easy to do business in Peru as it is in Peoria. Result: The number of startups venturing overseas is skyrocketing. One recent study found that the number of multinational companies has swelled from 7,000 in 1975 to approximately 40,000 today. In addition, the net income of U.S. companies from operations outside the States now accounts for about half of income earned at home, compared to just 10 percent in 1950.

Read the full article on Fortune.com

Posted in Business Tactics, Going Global, Small Business | Leave a Comment »

Top 10 States For Taxes

Posted by iBlog on August 9, 2007

Find out what states love small business on CnnMoney.com

Posted in Finance, Small Business | Leave a Comment »

Should You Offer a Free Trial?

Posted by iBlog on August 9, 2007

I want to expand my customer base. Are free trials worth the investment?

Absolutely. A free trial is a great marketing tool and a solid step toward establishing good will with new customers. Trials with products aimed at particular audiences are effective, such as chewing gum geared toward people with dental work, tasty protein bars for athletes or eye shadows that complement certain eye colors.

Read the full article in Forbes.com

Posted in Entrepreneurship, Small Business | Leave a Comment »