HR and Management

Many adults remember growing up with the honor system. But can it work in the business world? Canadian business owner, John Bergen seems to think so. His Kitchener, Ontario-based City Café Bakery relies on the honor system. In fact, City Café doesn't accept credit cards and doesn't even have a cash register. Instead, customers add up how much they owe and dispense it into a fare box from an old bus.

"I liked the idea of simplifying things and . . . the honor system made a whole lot of sense," Bergen said.

In order to make the system work, Bergen has simplified the cost structure. So items are rounded off to the nearest quarter, with taxes included when applicable. Every six months, the bakery performs an audit. Since opening in April 2000, Bergen says the bakery has come up short only once.

Bergen says people will underpay, either on purpose or by mistake, while others will overpay if they don't want to wait for change. "And every so often we have to kick somebody out that we know hasn't been paying," Bergen said.

But according to Bergen, overall, the system works. Per week, the café and bakery sells about 3,000 bagels, 1,200 croissants, and 1,000 desserts. Bergen and his partners are interested in opening three or four more locations in the area, all integrating the honor system.

The next time you're creating a travel budget for your next out-of-state conference or meeting, you may want to pad it more than usual. As of today, five of the six major U.S. airlines are charging an extra $25 to check in a second bag ($20 on JetBlue). American Airlines, the last holdout, is said to be following suit next week, and several other carries, including Alaska Airlines and Air Canada, are expected to do the same in the coming months.

As this MSNBC.com article states, it's the first of many changes that will drive up the cost of flying. "From snacks to seat selection, we're about to enter the next great age of unbundled airfares." However, according to the article, the fees only apply to domestic coach passengers who purchase lower-cost, non-refundable fares.

For business travelers, the new standards could become costly. Should you need to check a third bag for your upcoming trade show exhibit, for example, expect another $200 charge round-trip.

The April 2008 SurePayroll Small Business Scorecard, an economic indicator that tracks the health of U.S. small businesses, indicates that small business hiring increased last month and salaries decreased slightly.

Year to date, small business hiring has increased 1.0 percent and salaries are down 0.1 percent. The current average small business salary in the United States now stands at $32,567.

"Hiring was up last month but the pace of growth was very low compared to prior months," noted Michael Alter, President of SurePayroll. "Entrepreneurs are incredibly resilient, but it does appear that the economy is taking a toll on small business growth."

SurePayroll's analysis is based on payroll records of over 18,000 companies who use SurePayroll's payroll service. For more details on the SurePayroll Small Business Scorecard, visit SurePayroll's website.

What happened to the days of laying your head on your desk and drifting off for 20 minutes of bliss? Though most of us haven't enjoyed naptime since elementary school, some scientists say naps aren't just for 6-year-olds. According to this washingtonpost.com article, "sleep scientists have discovered advantages to napping, which they view not just as solace but also as something akin to brain food."

The article cites a 25-year survey conducted by researchers at the University of Haifa in Israel showing that naps, when taken in the workplace, can increase productivity and reduce "general crabbiness." Other experiments echo those findings. For example, Matthew A. Tucker of Harvard Medical School discovered that a 45-minute nap can enhance the ability to perform tasks relying on memory.

As a result, some companies are making nap rooms available to their employees, or encouraging them to relive their elementary school days by resting at their desk. One New York City sleep salon, Yelo, is taking advantage of the trend by offering a place for clients to nap for 20-to-40 minutes at a time.

To read more about the growing acceptance of napping, and to determine if you could use more naps, check out the book Take a Nap! Change Your Life, by Sara Mednick, or utilize her website.

According to recent data from the OPEN from American Express Small Business Monitor, small-business optimism is at its lowest point in the survey's six-year history. Some of the main concerns cited by small-business owners include cash flow, the costs of doing business and rising energy costs.

The economy is also affecting how entrepreneurs will vote come November. According to the survey, four in 10 small-business owners say the economy is the issue that will most sway their decision in the upcoming presidential election.

The survey discovered that business owners in the retail industry have the most negative outlook on the economy. In addition, about 20 percent of small-business owners in the North Central states report that their companies risk going out of business due to the economy.

Despite these dismal statistics, the OPEN from American Express Small Business Monitor found that growth is still a priority for entrepreneurs, reporting that seven in 10 business owners plan to grow their business over the next six months, with 31 percent planning to hire.

Customers are taking the upper hand as prices for products and services become more negotiable, the Los Angeles Times and The New York Times report. Many small businesses are no strangers to negotiating deals. But as haggling hits larger businesses, small businesses may need to lower their prices, or customers will likely find better deals at larger stores like eBay, Amazon, and NexTag.

Feeling the squeeze of a slowing economy, both business owners and consumers search for ways to move forward. Included along with the Los Angeles Times article is a tip sheet for wannabe hagglers. One such tip: "Loyalty counts." This suggests to small businesses that rewarding loyal customers with lower prices may win them and their business over. And it's just one way business owners can survive through this temporary downswing.--Whitney Chen

Does your company need a chief blogger? That's the question being asked by this Advertising Age article. Now that the novelty of corporate blogging has passed, blogs are being viewed as a branding voice. Companies like Coca-Cola, Marriott and Kodak have all hired chief bloggers to engage customers and share their stories.

But, as the article points out, a blog voice isn't necessarily right for every brand. Analysts say that companies that want to blog should first identify the reason they want to do so. "They really need to start with reading, following their customers, commenting on communities. Then think about creating something," says Sean Howard, director of strategy and innovation at Lift Communications and blogger for CrapHammer.com.

According to Geoff Livingston, CEO of Livingston Communications and blogger for Buzz Bin, companies need to look beyond the blog. "What [companies] need to focus on are the principles behind social media that make it work, like participating in a larger community works, and not controlling the conversation works," Livingston says.

Last week, Microsoft Office Live Small Business held its first Vision to Venture event, an entrepreneurial conference for new and veteran women entrepreneurs.  The event featured discussions and presentations by experts including Rich Sloan, author and co-founder of StartupNation , Susan Wilson Solovic, author and co-founder of Small Business Television , and John Jantsch, author and founder of Duct Tape Marketing . The day-long conference, which debuted in St. Louis, will travel to four more sites over the next month. After May 15, the conference will be available as an on-demand webcast and a portion of the proceeds will be donated to Dress for Success, a nonprofit that provides interview suits, confidence boosts and career development to low-income women in more than 75 cities worldwide. --Lindsay Holloway

For many entrepreneurs, the words 'startup' and 'debt' go hand-in-hand. If you find yourself in that category, check out banking website Bankaholic's article on preventing business debt. The article offers eight causes of business debt that the writer says are easily avoidable. Here are some of the causes mentioned:

• Not sticking to the necessities
• Trying to do too much too soon
• Not designing for scalability
• Failing to delegate
• Buying in bulk

Check out the rest of this list for more detailed explanations and tips.

In coordination with National Small Business Week, April 21 to 25, the SBA launched a new website that will include detailed information, event schedules, highlights and multimedia content. User-friendly, interactive features include uploadable event photos, real-time updates and a blog.

“[The website] represents a new platform for how the agency can engage in a dialogue with small businesses online,” says Anoop Prakash, SBA associate administrator for entrepreneurial development. Following National Small Business Week, the site will provide upcoming events and resources for community members and small business owners. --Lindsay Holloway

If a picture is worth a thousand words, than a facial expression is priceless. According to this  USA Today article, facial coding is finding its place in the business world. Dating back to the 1960s, facial coding was studied by psychologist Paul Ekman, who found that facial expressions are learned early and universal. To support this, a study published in the February issue of Psychological Science found that students could identify the most successful people when faced with 1,000 photographs of CEOs.

Dan Hill, an expert in facial coding, came to these conclusions after viewing YouTube videos of well-known CEOs:

• Microsoft Chairman Bill Gates had a high percentage of positive expressions, though he displayed "small, weak social smiles and touches of contempt."
• Oracle CEO Larry Ellison displayed 100 percent negative expressions. Hill points to his raised lower chin and lips pulled together "with anger and some disgust and sadness mixed in."
• Dell CEO Michael Dell scored 47 percent positive in his facial expressions, though Hill said he "strikes me as chagrined and a little defiant."

Read the rest of the article to find how the other CEOs were evaluated.

The secret to employee happiness may be simpler than you think. According to a recent survey, commissioned by Florida-based Blumberg Capital Partners, one in three workers said they had accepted a job--or quit one--because of the most basic working conditions. The top areas of concern for many of the 500 employees surveyed were the indoor climate, filthy bathrooms, outdated furniture, persistent foul smells, leaky ceilings or windows, worn carpeting and rodents or insects. More than 75 percent of those polled said the condition of their offices affected how they viewed their employer, and 30 percent said they worried that unhealthy or unsafe working conditions in their building could make them sick.

Amy Lyman, co-founder of the Great Place to Work Institute, says when employees complain about unfavorable office conditions, there's usually more to it. "People don't quit just because the bathrooms are dirty," she says, "but because employers that don't keep the bathroom clean don't respond to other worker concerns as well." According to Lyman, the bathroom message is that "these are not high-trust environments."

Do you think you have what it takes to be our next Entrepreneur of the Year? Show us what makes you and your company stand out from the rest by entering Entrepreneur magazine's 2008 Entrepreneur of the Year contest, presented by The UPS Store. To enter, go to the Entrepreneur of the Year page on Entrepreneur.com, and click on the red "Enter Now" button. You'll fill in information on the background of your business and on yourself as an entrepreneur. To qualify, you must have fewer than 100 employees, have at least $500,000 in annual sales in 2007 and own at least 51 percent of your business.

Winners will be chosen in two categories: Entrepreneur of the Year and Emerging Entrepreneur of the Year. Entries must be received by June 30, 2008. The awards ceremony will take place during an all-day conference for entrepreneurs in Long Beach, California on December 9, 2008. To learn more about eligibility, prizes and restrictions please see the contest rules.

By now, you've probably heard plenty about HR 5140, also known as the Recovery Rebates and Economic Stimulus for the American People Act of 2008. But now that it's been signed, what does it mean for small business? According to Small Business Administration administrator Steve Preston, it works in the favor of small-business owners. "This bill is a win for small businesses in three major ways: Tax rebates will stimulate short-term consumer spending, some of which will flow to smaller companies; a 50 percent bonus deduction on new equipment that normally would be depreciated over the long term; and it increases the limit on expenses that small businesses can deduct from annual income," said Preston.

As for the future, Preston says the SBA will urge Congress to work on issues like permitting health insurance pooling and deductibility, opening new markets with Colombia, Peru and South Korea and guaranteeing that taxes on small-biz earnings and investments don't rise.

Attendees of the Women in Charge conference in Miami Beach, Florida rushed to hear Entrepreneur columnist and internet entrepreneur Rosalind Resnick teach the breakout session, The Money Game: How to Get What You Deserve.

“If you want to take your business to the next level, it’s not enough to fly by the seat of your pants,” Resnick said. “You need to do the math to create a profitable and scalable business model and raise the capital necessary to execute your strategy.”

Resnick, an internet business pioneer and author of Getting Rich Without Going Broke: How to Use Luck, Logic and Leverage to Build Your Own Successful Business defined debt financing and equity financing. Debt financing--bank loans, home equity loans, bank lines of credit and the like--is funding you must pay back. Equity financing is selling a piece of your company to investors for cash. They control a percentage of your company and have a stake in the revenues.

Resnick also defined the rules of venture capital, encouraging attendees to study any VC firm they approach as well as learn the merits of the term sheet before signing on the dotted line. She reminded entrepreneurs that a deal should be beneficial to both sides before signing.

Writing a solid business plan that includes impeccable financial figures is key to receiving any funding though, she noted, so entrepreneurs should spend a lot of time on this step. “[Build] a solid business plan with a bullet-proof financial model that can pass muster with even the toughest bank or investor,” she said.

Finally, Resnick opened the floor to questions from the attendees who asked how to connect with angels and investors as well as how much a small business can expect to pay for financial consulting. She answered all the questions and even spoke one-on-one to entrepreneurs after the session. Using the strategies laid out by Resnick, entrepreneurs should be prepared for anything. --Nichole L. Torres