A plaque is unveiled in NHS founder Aneurin Bevan's constituency to mark the health service's 60th birthday.
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The International Centre for Families in Business are pleased to have teamed up with Charles Russell and Sharemark for a seminar in London on the topic of securing the value of the family business.

This seminar seeks to focus on how the creation of an appropriate ownership structure can simplify the succession planning process for family businesses.

Taking place on:
Thursday 24 May from 4.00pm onwards
8-10 New Fetter Lane, London EC4A 1RS

Topics for discussion include:
- Real life disasters and successes;
- Share plc – a case study of a company that gave away ‘free’ shares and thrived!
- Resolving conflict in family owned businesses;
- Tax efficient structuring of the share ownership for family business succession;
- Planning owner and manager succession
- Share schemes in family companies

Our guest speakers will be:
Gavin Oldham - CEO of Share plc
Gavin will share his corporate experience, and particularly the advantages of broadening ownership of the business
John Tucker - Director of The International Centre for Families in Business
John who will be able to offer a practical insight into some of the difficulties experienced by family owned businesses

For further information, please contact Emma Vigus or Sophie Douglas at info@sharemark.co.uk or give them a call on 01296 439 435

Founded in 1912, the Morgan Motor Company is world renowned and often referred to as the "first and last" family owned sports can company in existence. Paul Andrews went to meet Charles Morgan, Director and grandson of the founder of the business to find out more.

Charles Morgan, the third generation of the family to work in the business, joined the Morgan Motor Company in 1986 after spending ten years working as a cameraman for ITN and as a businessman he now finds himself at the helm of an organisation that has a reputation for hand-built cars.

"The Morgan Motor Company skilfully designs and manufactures sports cars that reflect the individuality and sense of style of our customers but our loyal customer base want the car to remain hand-built in the traditional way, whilst taking into account the need for process improvement, the latest technology and continuous advancement which are all part of the modern day approach at Morgan" explains Charles.

Based in the heart of the Malvern Hills, Morgan manages to differentiate itself from other car manufacturers around the world in the way that it makes its cars. Continuing to use traditional coach building techniques, sheet metal work, trimming and upholstery are all trademarks associated with the classic cars they produce, yet Morgan remains at the fore when it comes to technology and the need for advancement including ABS, paintshop technology and electronic brake distribution.

So how did it all start?
At the age of 25 Charles’ Grandfather opened a garage and motor works in Malvern Link and created a successful business as a bus service operator, and the first Morgan Runabout was born when HFS Morgan purchased a seven horsepower twin-cylinder Peugeot engine and mounted it within a lightweight three-wheeled chassis. With a rigid frame, lightweight, unusual power to weight ratio of 90 brake horsepower and independent front suspension the car was to prove a success.

The car was never intended to be marketed at the outset but the Morgan dream was to begin after numerous favourable comments were made about this initial car. Following a move into the Malvern Garage that was provided by his father, and capital investment to purchase the necessary tools, HFS Morgan began to manufacture motor cars in 1910. And that was the start of The Morgan Motor Company that is thriving today.

From the first three-wheeler Morgan has gone from strength to strength and now produces a number of classics including the Morgan 4/4, Roadster and Aero 8.

And so to Charles...
Charles Morgan joined his father in the business in 1968 and is the first to admit that the business life was a significant change from travelling around the world as part of a television film crew. But maybe the move into the business was inevitable as with a passion for motor cars Charles is the first to admit that he "must have been born in a piston!"

Charles adds that "from a very young age I remember going out on test drives with my father, and on once occasion before the 70 mile speed limits were introduced I remember being in a car doing 140 miles per hour down the motorway testing the Le Mans car when we had a tyre blow-out. I was about 8 years old, had no seat-belt on and will never forget the moment that the car veered to the side of the road and came to a halt. We were never in any real danger and my father was an excellent driver but try explaining that to an eight year olds mother when you get home!"

"When I joined the business I knew a little about cars and knew that I had a passion for cars and motor racing, but my knowledge was not sufficient to be of enough value to the business so I learnt as much as possible from my father and at the same time undertook a Manufacturing Technologies Course at Coventry University. The course provided me with an insight into manufacturing and enabled me to bring back new ideas and practices to Morgan, at a time when the motor sector was seeing fundamental change:

• Level of bureaucracy and paperwork to get approval for models was growing
• Pressure to improve car safety was increasing
• Need to build more modern cars
• Need to improve efficiencies in order to succeed as a business

"I learnt a great deal from my father, not least the need to have passion and desire to achieve what you believe in. He had it and I have it, and the desire to be true to the Morgan roots whilst growing for the future is still a key driver in the business for me and my staff. Over time, with the support of my father, we nurtured the design of the Morgan car which I firmly believe provided strength and belief in the product to the workforce – our desire to be the best" adds Charles.

"Dad had always said that it was important not to overstretch either oneself or the business and this is a core value for me and the business today. We dealt with problems and issues together – be it legislation, production, concern over the environment. Doing things together is a great way to learn, and it engenders further respect and belief for the future amongst the staff."

Values that are important to Morgan
• Dedication to purpose of the whole team from the designers to the production workers ensuring that everyone is focused on the delivery of the whole car
• Continuing with tradition in the use of timber and aluminium in the build of the car, albeit in unconventional ways such as lamination of the wood.
• Continuing to add detail to every car in the trimming process with bespoke interior finishing
• Sensible employee interface
• Continuing to make sure that Morgan cars do what is expected of them and are simple to drive

And what of the future of Morgan...
Charles is fully aware that Morgan is a family business and of the strengths and weaknesses associated with these organisations. He is also aware that the business can only retain its family business status by the continuing involvement of the family.

"I have children and would love for one or more of them to be involved in the business in years to come. However, any one of them that wanted a role would need to demonstrate that they had a contribution to make. I would encourage them all to work elsewhere first and make sure that they had something to offer – probably making them better than the people we would have otherwise employed to do the role that they come in to do."

"We are a serious business and have a balanced Board of Directors with a mix of skills and have engaged the involvement of a number of Non-Executive Directors to work with us going forward. There are only 4 shareholders and they are all welcome to attend any of the executive board meetings and as there are only 4 of we are in regular communication anyway which helps us to make the decisions we need to make. The motor industry has changed, and continues to change rapidly and we need to respond to this on a timely basis. Being a family business affords us a number of benefits but we do need to keep abreast of the changes that are expected of us, such as fuel consumption, care for the environment and safety."

"For me, the key to success is belief in your product and being passionate about what you do. As a family business we can make decisions quicker and focus on what we need to do, but we also have a great responsibility –Morgan has been around in the local community for nearly 100 years and staff are loyal and supportive of the business. We have a responsibility to make the business work, not only for our immediate family, but also the wider employee base and the community as a whole. This is a role that I take extremely seriously."

So what is it really all about?
Charles thought long and hard before answering this question and confirmed that for him it is ultimately about looking back and seeing that he has successfully steered Morgan through some difficult times, adding to the heritage and tradition of this classic car manufacturer.

Charles continues, "For me I love to drive and you cannot beat the thrill of mastering a machine like a Morgan in a safe and controllable way. I still get a real buzz from demonstrating the Morgan to customers."

"Being a family business provides great opportunities and challenges and at Morgan we have had our fair share of ups and downs, but are now in a good position and the family business has some exciting times ahead, not least with the launch of a new car early this year."

"I am a bit different and a bit eccentric but I know what I am good at and at the end of the day my legacy will be to leave Morgan as a recognised force for good in the motor industry the ‘leisure market’ as well as to have provided employment locally, to leave a successful company that can prosper for years to come. Having said that, I plan to be around for years to come, and who knows, there may yet be another Morgan to pass on the mantle to, provided they can bring the right experience to the company!"

Tips from Charles Morgan
1. Make sure that the family issues do not complicate the business issues and make use of external advisers as appropriate
2. Make sure that the external advise does not complicate the family issues to the detriment of the business needs
3. Generate the passion. Working in a family business should be a thoroughly enjoyable experience otherwise you might as well go and work somewhere else!
4. Never expect it to be a 9-5 job as the family business is 24/7 and you and the family need to realise that from the start.

THE UK’s first family business club has been launched on the South Coast by accountants and business advisers Princecroft Willis who joined forces with The International Centre for Families in Business (ICFIB) to launch the new venture.

The aim of the club is to develop a support network for family businesses where issues specific to their sector can be discussed and experiences and successes shared. The inaugural meeting was held in Bournemouth with plans to hold quarterly sessions from June onwards.

The founder members include a family owned fashion store established in 1872 and spanning five generations; a group of seven holiday parks run by a company named 2006 Dorset Family Business of the Year and a family run office supplies’ firm founded in 1963.

John Tucker, ICFIB Director, who was the guest speaker at the first meeting, described the club as a “UK first" adding, “We are delighted to partner Princecroft Willis in developing and launching the first family business club in the UK. Family owned and run businesses are an extremely sector in the UK economy and this initiative is an extremely important piece in the jigsaw of professional support for this sector of the business community.”

Nick Love, Family Business Partner at Princecroft Willis believes that
"the launch of the UK’s first dedicated family business club represents an opportunity to put an important, but often overlooked, business sector on the map.”

Membership of the club is by invitation only. For more details, please contact Nick Love on 01425 610166.

The International Centre for Families in Business has teamed up with Sharemark, Veale Wasbrough and Hazlewoods for a seminar focusing on how the creation of an appropriate ownership structure can simplify the succession planning process.

This will be held:
Tuesday 22 May from 4.00pm onwards at Leigh Court, Abbots Leigh, Bristol, BS8 3RA

Key topics for discussion include:
- Real life disasters and successes;
- Share plc – a case study of a company that gave away ‘free’ shares and thrived!
- Resolving conflict in family owned businesses;
- Tax efficient structuring of the share ownership for family business succession;

Our Chairman and guest speakers will include:
John Hughes
A leading figure in the Bristol Business Community and a founding director of Mail Marketing Group;

Gavin Oldham
CEO of Share plc, who will share his corporate experience, and explain the advantages of broadening the share holder base;

John Tucker
Director of The International Centre for Families in Business, who will be able to offer insight into some of the difficulties experienced by family owned businesses;

David Pierce
Business advisory partner of Hazlewoods LLP will look at the various options for passing on shares within the family, tax efficient ways to realise value for those shareholders who want to exit, and how to incentivise non family members who are key to business.

For further information, please contact Emma Vigus or Sophie Douglas, info@sharemark.co.uk.

Family charters are all the rage, but what are they and what can they do to enhance your family business, Paul Andrews outlines more…

What is a family charter?

The first issue that comes to the fore is the lack of clear and concise definition of a Family Charter. Not surprisingly; it could be confusing for those family businesses contemplating making use of a family charter. A number of definitions are in common use, such as; family constitution, family creed, family agenda, family continuity plan and family charter.

What do the experts think?

In essence, leading family business experts have come together in broad agreement, addressing this to a certain extent, such that Davis (2002) contends that a family charter “articulates a family’s vision for itself and the business, the family’s core values and the policies and guidelines that regulate how the family will relate to the business – as employees, owners and family members.”

Jaffe et al (1998) suggests that family charters are “instruments of governance” and Fogel (2003) defines a family charter as “a statement of principles designed to guide a company through times of crisis and change.” Tucker (2003) concluded that the family charter is “the written, explicit set of guiding principles that provide family members with a sense of identity and mission that transcends their rights as owners and their roles in the business.”

So in summary, the family charter supports other governance structures and legally binding agreements within the business, such as the business plan and the shareholders or partnership agreement.

It also clearly covers areas that will help to establish a framework for addressing the different roles that family members have within the business.

However, more important than the name is the content and what it can do for the family business, ironing out some of the grey areas, and providing a framework for the family going forward, and helping those not involved in the day-to-day running of the business keep in touch and make sure that their views are heard.

Areas that tend to be featured in the family charter include:

• Family vision statement
• Family mission statement
• Family values
• Management philosophy
• Family jobs and remuneration
• Contribution of the family to the business
• Leadership
• Share ownership
• Composition of the board of directors
• Communication
• Conflict resolution measures
• Training and education of succeeding generations
• Treatment of employees

What is the end result?

Speaking to Michael Silvey, Chairman of Thomas Silvey Limited, a £40 million turnover fuel distribution business and you can begin to understand some of the benefits the family charter provides, not just in the formal document, but in the undertaking of the journey the family has taken in creating the document that articulates the family charter.

This in itself can be a very powerful force in determining collective views of the family and what they want for the future, gains in buy-in to the family business and the journey provides a forum for different views to be aired, discussed and a consensus of opinion obtained. This journey of family discovery sets the foundations for the future and is seen by many as more important than the written document itself.

As Michael explains, “the process we have been through, and are still engaged in, has been wholly constructive for me, the family and the business and we have put a lot of effort into the process itself – it has not simply been a form filling exercise but of benefit in a number of ways:

•The journey has forced us to become involved owners and take full responsibility as owners of the business;

•It has encouraged us to take proactive roles with respect to the conduct of the business, including the part-time involvement of husbands, wives and children; and

•It has greatly encouraged those family members not working in the business to see the business as a worthwhile long term asset, both for them as individuals but also the family as a whole.”

Michael is fully supportive of the family charter process and believes that the business is already benefiting from the meetings, discussions and debates that have been generated as a result of embarking on the Silvey Family Charter. In fact, he continues, “the family has already benefited in a number of ways:

•Staff morale has improved as they are beginning to recognise that they have family members actively supporting them in their roles

•Overall board competencies have improved through the involvement of talented members on a part-time basis

•The involvement of family members through the family council that has been created is helping to develop a vision and culture for the business that is at one with the family”

Above all, Michael believes that “the business will recapture the energy and confidence that its’ founders had, investing in the future, innovating, and continuing to be good employers.”

There is no doubting the significant impact a family charter can have on the family business, bringing family views together and becoming the platform for future success, articulating the views of the family and embracing the momentum of the family in support of those family members actively working in the business with the energy, skills and experience of the whole family. However, Michael is the first to point out that “the Family Charter will only be successful, and continue to be so, if the family and the board of directors continue to see it as an evolving document, keeping pace with the marketplace and the changing needs and views of the family.”

Family Charters are powerful aids to the family business community and need to be recognised as a direct product of the time and effort spent ensuring that the collective views and desires of the family are appropriately captured and distilled to help the governance and direction of the business, for the benefit of everyone, the family, the business; the employees and the wider community in which the family business operates.

http://www.princecroftwillis.co.uk/family-business.asp

We are delighted to be working with Princecroft Willis to identify the key issues and challenges facing family businesses in Dorset.

If you are a family business and are based in Dorset, please take 5 minutes to share your views by completing the online questionnaire using the link below.

http://www.princecroftwillis.co.uk/family-business.asp

The team at The International Centre for Families in Business are delighted to announce the launch of the inaugural GENERATION Family Business Awards which seek to provide recognition of the successful contribution that family businesses have made to the economy. These awards also provide an opportunity to celebrate the success that has enabled family businesses to survive for many generations too.

With awards to recognise the success of family businesses in every stage of their development, these awards are an important platform in taking the family business seriously.

The Awards Process
Nominations are sought for each of the four categories prior to April 30, 2008 after which a shorltist of candidates will be announced for each category.

A member of the judging panel will contact each of the shorlisted nominees to enhance their knowldege and understanding of the family business and report their findings back to the panel where the winners will be selected.

The winners will be announced during the Familiarity 2008 Conference on October 30 in Bristol, followed by a champagne reception.

The Awards Categories
Best First Generation Family Business
Best Second Generation Family Business
Best Third Generation Family Business
Best Fourth Generation and Beyond Family Business

Please send an email to info@icfib.com to register your interest in the awards and receive an application form by return.

Chancellor's Concessions
Welcome news for family owned businesses

During his Pre-Budget Report in October 2007, the Chancellor announced a major reform to the Capital Gains Tax regime. From 6 April 2008 a single rate of tax of 18% will apply to capital gains and taper relief and indexation allowance for individuals will be withdrawn.

The new regime was designed to be simpler. However, it effectively increases the tax rate for many entrepreneurs selling their businesses, after owning it for two years, from an effective 10% to 18%.

Following the much publicised pressure from business groups to address this situation, the Chancellor has recently announced a new concession called "entrepreneurs' relief".

The relief is good news for the family business community in that it will apply:

1.to gains made on the disposal of all or part of a trading business; or
2.to certain gains made on associated disposals of assets following the cessation of a business; or
3.to gains made by certain individuals who were running the business, for example resulting from the sale of shares in a trading company where the shareholder is an employee or a director and holds at least 5% of either the ordinary share capital or the voting rights.

Trustees will also benefit from the relief.

Any gains, up to a lifetime limit of £1 million, that will qualify for the relief will be charged at an effective rate of 10%. Subsequent gains will be charged at the new rate of 18%.

Whilst draft legislation has not yet been issued it appears that the individual will have to satisfy certain conditions for a period of one year in order to qualify for the relief.

Veale Wasbrough are working closely with the team at The International Centre for Families in Business in addressing the issues facing the family business community and Richard Pincher, a Tax Partner at Veale Wasbrough and a member of the firm's Family Business Team explains the benefits of this change of heart by the Chancellor:

"Firstly, many family businesses may have been concerned that a future sale of their business would have been subject to the new 18% tax charge whereas the good news is that this new relief will ease these concerns on gains of up to £1,000,000."

"Furthermore, there may be the possibility, through carefully planned succession and intra-spouse transfers, to maximise the use of the £1,000,000 limit and take advantage of the effective rate of 10%. All we have to do now is await the draft legislation. In the meantime, we would be happy to discuss any queries you may have."

John Tucker, Director at The International Centre for Families in Business is aware that this is a big issue for the family business community today.

"Many thousands of businesses across the UK are facing the issue of succession and one of the options is inevitably the sale of the business. A key consideration for any family business owner is how to plan for a sale in a tax efficient manner and we would welcome this proposed amendment as it will lessen the burden on the family business community."

Published:July 3, 2008Paper Released:June 2008Authors:V. Kasturi Rangan, Herman B. Leonard, and Susan McDonald Executive Summary:

This paper considers the confluence of forces that is shaping the field of social enterprise, changing the way that funders, practitioners, scholars, and organizations measure performance. The authors trace a growing pool of potential funding sources to solve social problems, much of it stemming from an intergenerational transfer of wealth and new wealth from financial and high-tech entrepreneurs. They further examine how these organizations can best access the untapped resources by demonstrating mission performance, and then propose three potential scenarios, outlined below, for how this sector might evolve. Key concepts include:

• Consolidation: In this scenario of sector evolution, funding will keep growing in a gradual, linear fashion, and organizations will compete for resources by demonstrating performance, with a focus on efficiency. The sector will consolidate.
• Entrepreneurial: In a more optimistic future, existing and new enterprises will apply strategies to achieve and demonstrate performance, improving efficiency and effectiveness and attracting new funding sources.
• Expressive: Rather than focusing exclusively on performance, funders and organizations may view their investment as an expressive civic activity.

The Future of Social Enterprise considers the confluence of forces that is shaping the field of social enterprise, changing the way that funders, practitioners, scholars, and organizations measure performance. We trace a growing pool of potential funding sources to solve social problems, much of it stemming from an intergenerational transfer of wealth and new wealth from financial and high-tech entrepreneurs. We examine how these organizations can best access the untapped resources by demonstrating mission performance and then propose three potential scenarios for how this sector might evolve:

Consolidation: In this scenario, funding will keep growing in a gradual, linear fashion and organizations will compete for resources by demonstrating performance, with a focus on efficiency. The sector will consolidate, with some efficient organizations gaining scale, some merging and then growing, and some failing to achieve either scale or efficiency and eventually shutting down.

Entrepreneurial: In a more optimistic future, existing and new enterprises will apply strategies to achieve and demonstrate performance, improving efficiency and effectiveness and attracting new funding sources. More organizations will enter a reformed, competitive field of social change with new entrepreneurial models, established traditional organizations, and innovative funding strategies fueling widespread success.

Expressive: Rather than focusing exclusively on performance, funders and organizations may view their investment as an expressive civic activity. As much value is placed on participating in a cause as on employing concrete measures of impact or efficiency. In this scenario, funding will flow as social entrepreneurs experiment with new models based on a range of individual priorities and relationships.

• Full Working Paper Text
• Working Paper Publication Date: June 2008
• HBS Working Paper Number: 08-103
• Faculty Units: Marketing  General Management 

When TPG co-founder David Bonderman berated the Japanese for their pace of doing business (and then justified his comments by claiming, "They hate us but that's OK because we hate them, too") his fellow partners reportedly banned him from ever visiting the country.
Read more [Teslegraph Business] 

Today is Take Your Dog to Work Day, an annual event celebrating its 10th year. While companies of all sizes participate, small-to-midsize companies “are generally more accepting of the day,” says Terry Chance, marketing director at Pet Sitters International, a pet-sitting trade group (yes, it’s true) that created the event.

Every few weeks a press release lands in my inbox from a small company touting its innovative benefits — including management’s welcoming attitude toward employees who can’t bear to leave Fido at home.

In a good economy or bad, many entrepreneurs view a liberal attitude toward pets at work as a valuable perk for recruiting. (A few less-conservative big businesses allow dogs, too. Here’s Google’s policy on pets at work. One provision: “Dogs are not allowed on the sand volleyball court.”)

Proponents argue that dogs are a soothing presence, that they can improve the mood of an office. “Millions of employees feel that pets in the workplace lead to a more creative environment, decreased absenteeism, improved productivity and better co-worker relationships,” Mr. Chance says.

Detractors point out that not everyone is a dog lover — some people are allergic — and even if you love dogs, that doesn’t mean you want one milling around your feet while you’re putting together a presentation.

Would you welcome dogs at your workplace? Click on the letter to cast your vote:

Yes

No

View results

Do you want dogs in your office, on Take Your Dog to Work Day — or any day?

Photo credit: Aaron Landry via flickr

For young budding entrepreneurs or philosophers prepared to drink the Kool-Aid of objectivism, a college essay-contest by the Ayn Rand Institute asks students to wax philosophical about one of the ideas central to her book “Atlas Shrugged,” choosing among three questions to answer.

Winners demonstrating an outstanding grasp of the tome — a movie version is in the works–will be awarded in appropriate capitalist fashion: First prize: $10,000. Entries are due by September 17.

A 20-something colleague returning to grad school wondered which question was best to answer. (She’s just getting started on the book.) Since “productive achievement” is man’s noblest activity, according to Rand’s philosophy, I figured I’d encourage hers by soliciting opinions from WSJ Rand fans. She’ll choose only after finishing the book, of course, so she can assert her own individualism.

Here are the three questions to choose from:

1. Why do Dagny and Rearden oppose the strikers in action?

2. Explain Ragnar Danneskjold’s statement that Robin Hood is the one man he is out to destroy. What is the deeper moral meaning of his claim?

3. For each of the following three passages from Atlas Shrugged, explain its meaning and its relation to the story and theme of the novel.

a. Galt: “In any compromise between good and evil, it is only evil that can profit. In that transfusion of blood which drains the good to feed the evil, the compromiser is the transmitting rubber tube.”
-Part Three, Chapter VII

b. Dagny: “We never had to take any of it seriously, did we?”
Galt: “No, we never had to.”
-Part Three, Chapter I

c. Francisco: “You have a great deal of courage, Dagny. Some day, you’ll have enough of it.”
-Part One, Chapter V

Readers, which question would you choose to answer? Which is easiest/hardest? Which hews most closely to the theme of Atlas Shrugged? (I picked No. 3.)

Ask business owners their biggest gripe, and finding affordable health coverage often tops the list.

Shopping for coverage often means scouring insurance-comparison Web sites and calling insurers directly for quotes — especially if you don’t have a broker working for you. Some professional organizations and other local groups, such as local chambers of commerce and health-insurance pools, offer their members health insurance. Yet there’s no guarantee their rates are any lower than what you’d qualify for on your own.

Even after an exhaustive search, some entrepreneurs may pay upward of $1,000 a month in health premiums. Have a pre-existing condition like diabetes or even high-blood pressure? Good luck finding insurers to cover you at all.

The best remedy, while often an exasperating task, is casting a wide net to find out what’s available and then carefully comparing the plans and costs you’d incur in different scenarios. Consider such questions as:

Find advice on evaluating health plans here and here.

Here are five sites to check that may help business owners find insurance, with comments on each:

1. eHealthInsurance.com. This agency site is good for all-around health-insurance shopping and online quotes. Information isn’t available for every ZIP code, however.

2. DigitalInsurance.com. This broker offers services for small businesses with online quotes for individual plans.

3. FreelancersUnion.org. This organization offers health-insurance plans to free-lancers in about 30 states.

4. StateCoverage.net. This Robert Wood Johnson Foundation project lays out health-insurance initiatives in all U.S. states.

5. Your state’s insurance-department Web site. These pages often include lists of insurers that sell health insurance in the state along with other useful information. Use this directory to find your state’s insurance-department site.

Readers, have you come across any good resources for finding health insurance? How did you find yours?
Photo credit: Brendan Adkins via flickr

In today’s Small Business Link, Kelly Spors and I look at steps small companies can take to ease the burden of rising health-care costs — both for themselves and for employees. Of course, navigating these waters without a human-resources specialist schooled in the latest tips and tricks often isn’t easy.

Among the options: encouraging employees to call nurse hotlines, rather than visit the doctor, or subscribing to online wellness programs that can help reduce costs by keeping employees fit. Some small companies have overhauled their coverage completely, moving toward consumer-driven plans that set high deductibles but often give employees a chunk of money each year to use for needs that might arise.

Only 59% of companies with between three and 199 employees offered health benefits in 2007, according to health policy think-tank the Kaiser Family Foundation. That figure has trended downward since 2001, when 68% of small companies offered health benefits. It’s a stark contrast to businesses with 200 or more workers, 99% of which offered health benefits last year.

For business owners, what’s the best fix for rising health-care costs? Click on the letter to cast your vote:

Move toward a consumer-driven system shaped by market forces

Adopt a nationalized system with single-payer health care

Keep the current system the way it is

Something else

View results

How is your company coping with rising health-care costs? What changes have you made?

Photo credit: Brooklyn Hilary via flickr

Anyone who’s started a business knows it can strain the best relationship. Even working together can be tricky. The New York Times wrote a story yesterday about the challenges of men working for their wives in entrepreneurial ventures. To smooth egos on the home front, many women made conscious efforts to give their hubbies ample recognition, sometimes switching who got the higher salary.

To keep peace, here are a few tips business owners and their spouses recommend:

1. Set timelines: The person starting a business needs a cushion before they’re expected to make money. But nonentrepreneurs needs a reasonable expectation of when that’s going to happen — or if it doesn’t happen, when their partner will pull the plug. Having a plan with financial and nonfinancial milestones (number of new customers signed, licenses obtained) will ease this transition period.

2. Have financial limitations: “Just another $5,000 and we’ll turn the corner…” Setting financial-investment limits is crucial if the start-up money is coming from your collective savings. That counts for credit-card debt and the number of times you return to family and friends for investment. You don’t want to get so far in the hole that if things don’t work, you’ll have no one left to lend you a hand.

3. Vacation: Take one. Starting a new business can be like cheating on your spouse, at least when it comes to time. Put aside a small amount of money each month just for this purpose. And carve out a week or even a weekend away and stick to it like it was a meeting with a buyer at Wal-Mart.

4. Don’t bring a spouse on board at the first sign of growth: As a firm gets bigger, it can be tempting to pull everyone in the household into the fold to help. But that means paying for health care when significant others quit their day job, or child care if they’ve been a stay-at-home parent. Run the numbers to make sure this move is cost-effective.

5. Know your ego: If you both do play a role in the company, try to spell out defined roles where you don’t compete. Deal with the salary issue up front: Do you both always need to make the same amount so no one feels threatened? Can you switch it up?

6. Starting a business isn’t the only dream that counts: Everybody lives once. An entrepreneur’s mission can be all-consuming; that’s often what helps it succeed. But your husband or wife’s dream of climbing Mount Kilimanjaro or taking a three-month sabbatical on the Amalfi Coast should carry equal weight, too. Plus, technology means you can often work from anywhere in the world. Use it.

If you’ve got other ideas to keep the peace in an entrepreneurial relationship, let us hear them.

Photo by freeparking @ flickr.com.

President Bush’s new choice to lead the U.S. Small Business Administration, Sandy Baruah, is already raising some questions and concerns among small-business groups.

Namely: Shouldn’t the head of the government’s small-business arm have actual experience running a small business?

Like outgoing chief Steven Preston, the former executive vice president of ServiceMaster Co. who’s now secretary of the U.S. Department of Housing and Urban Development, Mr. Baruah, pictured here, was never a small-business owner. He’s spent the past several years as an economic-development official in the Commerce Department. Before that, he worked seven years for a Portland, Ore., corporate-consulting firm.

The SBA administrator sets the tone for U.S. small-business policies and guides the agency’s important functions, such as seeing that small businesses get their share of government contracts, disaster relief and financing. Even though the new administrator may very well be out with the Bush administration in January – and has yet to be confirmed by the Senate — critics say it sets bad precedent to appoint yet another nonentrepreneur to the post. (Those disgruntled with Mr. Preston are now even more disgruntled.)

Supporters of President Bush’s choice say a corporate background brings much-needed efficiency and discipline to the SBA. Mr. Preston, though criticized for his handling of many of SBA’s core initiatives, took steps to streamline the agency.

Do you think the SBA chief should have experience running a small business? Why or why not?

There are nearly 3,000 franchise concepts out there. So which one is a winner?

Dick Gibson’s Journal story today offers one yardstick. He cites a Coleman Report study looking at the number of SBA-backed franchisee loans that went into liquidation. The measure gives an indication of the relative health of some 500 franchises.

Some loan winners:

And some loan losers:

While picking a good personal match is somewhat subjective, here are other ways to handicap a purchase. This WSJ story offers a list of franchise “high performers.” Out of curiosity, I cross-referenced this list with those considered winners in Gibson’s piece and found one overlap: Culver’s Frozen Custard.

There also are franchise boot camps that offer to teach you how to pick the best horse. And Entrepreneur magazine compiles annual lists if Top 10 franchises in multiple categories, such as the best home-based, best low-cost, and best new — based on growth, litigation and other factors.

Another approach is to use a search engine and blogs to learn about the litigation that franchise systems may be facing and what disenchanted franchisees are saying about their franchiser. This recent post about Cold Stone Creamery here is one example. FranchiseLawBlog.com lists class actions in progress. And FranchisePundit.com occasionally highlights the stories of unhappy franchisees, like this one from Subway.

What’s are other good franchise blogs? What are some of the best and worst franchise experiences you’ve heard of — and how could they have been avoided?

Photo by SqueakyMarmot @ flickr.com

By Mike Myatt, Chief Strategy Officer, N2growth  While you might be lucky enough to survive in business with little or no advice from others, you will certainly not maximize your potential for success by doing so. All CEOs and entrepreneurs need advice in a wide variety of constantly changing areas…That being said, as long as I’ve [...]
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