Category Archives: Business News

US House Approves Looser Rules for Closely Held Companies Seeking Equity

Bloomberg BusinessWeek has a story on two measures passed by the house of Representatives that loosens rules on equity investors for smaller enterprises:

House lawmakers voted 407-17 to pass a measure that would exempt from Securities and Exchange Commission registration firms that solicit and pool small investments, often online, of up to $1 million. The practice, known as crowdfunding, garnered bipartisan support after Obama’s Sept. 8 speech to Congress…

…Representative Kevin McCarthy, the third-ranked Republican in the House, sponsored a second bill passed today that would allow closely held firms to market offerings to accredited investors. The SEC currently bans closely held firms from soliciting funding from investors.

Both measures passed on a bipartisan basis and now move to the Senate for approval.

Cooperative Conference Highlights Employee Ownership and Succession Planning

A group of North American cooperative organizations are hosting a conference on business succession planning and employee ownership in Quebec City from October 11-13. Roy Messing from the OEOC will be participating in a number of events during the 3 days.

Interested? Find out more here.

New Belgium Brewing Uses Employee Ownership and Participation to Grow

The Northern Colorado Business Report has an interesting interview with Kim Jordan, CEO of New Belgium Brewing. Jordan details how employee ownership and participation (she uses the term “High-Involvement Culture”) have allowed them to manage and sustain growth:

By 1995, as we got more customers and coworkers, we expanded our vision to take their needs into account. We combined open-book management, employee ownership (our coworkers own 41 percent  of the company), and a high-involvement culture. Our coworkers can see all financials, And our plans for branding, sales, capital expenditures, hiring, budgets, and strategies – and they participate in strategy development.  Once everyone knows where true north is, it frees people from uncertainty and allows them to do more creative work.  Powerful ideas come from all across the company: big ideas, little ideas, money-saving ideas, and culture-building ideas.  I think most people here would tell you that they feel their contribution matters.

Food (and drink!) for thought…

Survey Finds Ohio Small Business Owners More Optimistic

A report in yesterday’s Cleveland Plain Dealer details the findings of a recent survey by PNC Bank of small business owners. Among the findings:

  • 15 percent of the Ohio businesses expect to hire more full-time employees in the next six months.
  • 34 percent of owners said their businesses were not hurt by the recession or have already improved.
  • 32 percent expect improvement within a year.
  • 86 percent of them said the nation’s economy is not making noticeable headway.
  • 62 percent said recovery is at least a year away.

Overall, those surveyed appear to be more optimistic about Ohio’s economy than the national economy. When you combine this with today’s news of a decrease in the unemployment rate (to a 2-year low of 8.8%), perhaps we are seeing a light at the end of the tunnel…

Bipartisan House Bill Encourages Creation and Expansion of S-Corp ESOPs

The Employee Owned S Corporations of America (ESCA) reports that a bill, the “Promotion and Expansion of Private Employee Ownership Act of 2011” (H.R. 1244) has recently been introduced by a bipartisan group of representatives. According to ESCA, provisions included in the bill will:

  • Enable owners of S corporations to sell their stock to an ESOP
  • Encourage the flow of bank capital to ESOP-owned S corporations
  • Provide needed technical assistance for companies that may be interested in forming an S ESOP
  • Protect small ESOP-owned businesses from losing their SBA certification when employee ownership of the company expands
  • Affirm the importance of preserving the S ESOP structure in the Internal Revenue Code

Sponsors of the bill include David G. Reichert (R-WA), Charles W. Boustany, Jr. (R-LA), Erik Paulsen (R-MN), Earl Blumenauer (D-OR), Ron Kind (D-WI), and Bill Pascrell (D-NJ). ESCA also has a link to the full text of the bill.

Potential NFL Lockout and Small Business has an interesting article on the effect a potential NFL lockout will have on small business. Some interesting statistics from the article:

  • The NFL is a $9 Billion a year business
  • It is estimated that every city with an NFL franchise stands to lose $160 million in revenue, or $20 million per home game
  • an aggregate of more than 115,000 jobs will be lost

The NFL is big business, for small business!

Let Your Customers Pay What They Want?

The Economist’s Which MBA? blog has an interesting post on the business sense of letting your customer name their price for your product or service. The piece builds off some research done at the Rady School of Management at the University of California San Diego:

The authors [of the study] set up their pricing experiment at the exit of a roller-coaster ride at a large amusement park. Riders were offered a photograph of themselves, snapped mid-coast. The usual price was $12.95, but on one day riders were told they could pay what they wished, including taking the photo for free. A second group was charged the full price but told that half the money would go to a well-regarded health charity. Yet a third group could set the price and see half of their chosen amount donated.

The study found that letting customers pick their price increased number of pictures sold and revenue…

Allowing customers to set the price dramatically increased the percentage of buyers—from less than 1% to 8%. Even accounting for those who took a free photo, the amusement park collected more revenue on the pay-what-you-want day than when selling for the usual fixed price. 

New Organization Advocates for Small Business

The Small Business Advocacy Council, a non-profit and non-partisan outreach and support group based in the Chicago area, has a new website, and has started a new blog. Both the website and the blog have a load of good resources for small business owners, and it’s definitely worth a look. (And, in the interest of full disclosure, I also happen to be one of the blog’s newest contributors!)

Growing a Green Economy

The Democracy Collaborative at the University of Maryland recently published a new survey, Growing a Green Economy for All, and made it available as a free download. The survey focuses on green jobs and “green ownership.” In other words, ESOPs and cooperatives. The book highlights two Ohio companies/initiatives: The EBO Group in Sharon Center, and our very own Evergreen Cooperative Initiative in Cleveland.

Cuban Cooperatives?

There is some interesting news on the employee ownership front coming out of Cuba, of all places. BusinessWeek has an interesting article outlining the changes in store for the Cuban economy.

First off, 10% of the government workforce (500,000 workers) will be fired. The Cuban government plans on utilizing three major initiatives to soak up the excess labor force: 1) expand the number of privately held, worker-owned cooperatives (the story mentions raising rabbits and making bricks…!); 2) encourage the creation of small-scale private enterprises (such as barber shops and food vendors); and 3) steer remaining laid-off workers to seek employment at foreign-run companies. 

Of course, the government also plans on utilizing that other side of a market economy…by taxing the revenue of the new privately held businesses!