As I draft this blog after the epic 2010 blizzards, it becomes easy to see how challenges can make us all feel a bit “snowed in.” Thirty inches of snow will hinder even the best of plans and intentions. Much like a recession can hinder the success of many small businesses. Will 2010 be better for business than 2009?

There is much information on the web regarding the trends and concerns of small business and all seem to agree that the major issue is the economy. The top five concerns facing small business are all regarding costs. The cost of Health Care and Social Security, the cost of increased federal and state taxation and energy costs are all at the forefront. These major issues along with the other expenses of operations are still a major snowstorm for business to navigate through. Optimism will be a key to small business success.

A recent survey of businesses with 5 – 499 employees showed that business optimism is currently at a twelve month high. Most would agree that this level is at its highest point since 2007. The survey which is ongoing was conducted by the American City Business Journals. It shows 75 percent of business decision makers thought at the end of 2009 that their prospects would be better for the next twelve months. Perhaps the most positive sign was that the number who felt the overall economy is turning around jumped from 28 percent last August to 40 percent currently. However, it must be stated that the level of optimism was still overshadowed by some rather dark clouds.

The survey also showed an increase in overall concerns about business safety and survival. This is a natural reaction to a severe business climate. This is also reinforced by the high percentage of business owners who still have concerns about the overall US economy. However, another sign of optimism was clear shift of concern toward employees; 47 percent of current business owners were more concerned about finding and keeping employees compared to just 27 percent less than six months ago. That movement is typically seen as a positive trend for the whole economy since it indicates a more robust job market. A higher rate of unemployment can produce this effect as well.  Seems there are almost as many negatives as there are positives.

Winston Churchill once said “I am an optimist. It does not seem too much use to be anything else.” There must be an emphasis on this type of positive thinking if small business is to survive. Just as I will have to dig out today one shovel at a time….so too will small business have to grasp a positive outlook and dig deeper to find solutions to the trials ahead. This is not a time for pessimism but a time for action. Small business should channel its focus on how to take advantage of an improving economy. Revisit your business plans, are they working or not? Measure and evaluate your customer satisfaction. Reexamine costs, personnel and equipment as well as infrastructure. Work smarter and harder and from positive energy will come success.
Will 2010 be better than 2009? Let’s stay OPTIMISTIC!

When referring to shares of stock in a Delaware company, par value is the bottom or lowest limit set to the value of a share of stock in a corporation. A share may not be bought, sold or traded for less than the par value. Simply stated, if the par value of a share is $1.00, then it cannot be issued to an investor for less than a dollar, paid for in funds or services. Par value sets only your bottom limit, but the Board of Directors may set the price of stock at any amount above par. Let’s say your par value is $.01 but the Board of Directors sells stock to an investor for $5.00 per share. This is perfectly legal. The board may ask any price and the investor pays what the market will bear. But keep in mind that you are selling some percentage of your corporation with each share you issue or sell.

If you’ve shopped around for an online incorporator, you might have noticed that they will often suggest a par value of zero. Why do they do this? Realizing that many people who are just starting their incorporations are small start-ups companies, incorporators suggest low to no par value so that the owners or initial shareholders will not need to make substantial investments into the corporations in order to own their companies at the time of organization. In the case of “no par” shares, they may be issued to the shareholders without the exchange of funds, goods or services. Having no par value will not restrict you in selling your shares to investors at the price determined by the Board, and accepted by the investor,  just like shares that do have a par value. Ultimately a share is worth what an investor is willing to pay for it.

Even though No Par stock sounds great, it is not for everyone. In many cases, corporations will want to assign a par value so that an investment (whether it be funds or services) is required in order to own a share in the company. This will help a corporation generate investment revenue for growth and/or help to recoup startup costs. Also, some states may have limitations to the number of shares that may be offered at no par, or charge additional filing fees and/or taxes based on the number of shares authorized at zero par. For instance, Delaware’s Division of Corporations will allow up to 1,500 shares of no par stock before you will begin to experience additional filing fees. In addition, franchise taxes for large amounts of no par stock (in excess of 5000 authorized shares) can prove to be very expensive.

If you have concerns about the impact of the number of authorized shares or the impact of the par value on your filing fees or franchise tax in Delaware, please feel free to give us a call or send us an email.

Poder360.com has a fantastic article written by Elsie Morales on How to Grow a Small Business. Below is an excerpt:

The evidence indicates that, while the corporate world continues to struggle, Americans are having more and more success finding their own solutions. According to the Kauffman Foundation’s most recent edition of their “Index of Entrepreneurial Activity,” new business formation was already on the increase in 2008, with the trend expected to continue in 2009. In fact, according to recently released data from the Job Market Index published by Chicago-based outplacement consultancy, Challenger, Gray & Christmas, the number of job seekers starting up their own businesses hit a four-year high in 2009. Enrollment in entrepreneurship courses has also risen in business schools across the country.

The percentage of unemployed people becoming entrepreneurs soared 69 percent to 8.6 percent last year, from a record low of 5.1 percent in 2008, according to Challenger. That’s close to the 2002 record level of jobless becoming self-employed. “Rather than endure several more months of unemployment as employers slowly move toward renewed hiring, many job seekers are opting to exit the labor pool and start their own firms,” the consultancy’s chief executive, John A. Challenger, said in a statement. “The start-up rate might have been even higher if banks had loosened their lending standards.”

The biggest gains in the ranks of the self-employed jobless came in the more experienced 55-and-older age bracket, according to Challenger. Some 93,000 people ages 55-64 joined the ranks of entrepreneurs in 2009, while a stunning 213,000 people ages 65 also struck out on their own. The younger generations were less enthused. The number of job hunters ages 35-44 who started their own businesses dropped by 70,000, while the 16-19 age bracket dropped 38.8 percent.

“Entrepreneurship used to be thought of as a young person’s endeavor, as it requires a significant amount of energy and drive,” Challenger found. “In fact, seasoned professionals have a decided advantage over their younger counterparts.”

In order to satiate the entrepreneurial spirit of our readers, this month PODER brings you an interview with Raffi Amit, a professor of management at the Wharton School of Business, and his insights on what every entrepreneur should know before taking the leap. Also, once you jump into the market, you’ll find some help from our accompanying 10 suggestions to improve business on the cheap.

A key question that all would-be entrepreneurs face is finding the business opportunity that is right for them. Should the new startup focus on introducing a new product or service based on an unmet need? Should the venture select an existing product or service from one market and offer it in another where it may not be available? Or should the firm bank on a tried and tested formula that has worked elsewhere, such as a franchise operation?

Raffi Amit, a professor of management at the Wharton School of Business, discusses these questions and more in a conversation with Knowledge@Wharton, the school’s online business journal. In the process, Amit offers insights into how entrepreneurs can identify new business opportunities and evaluate their potential and risks.