Building Customer Loyalty Focus of June 22 Economic Perspectives

Dazzling customer service is critical to business success, especially during a time when customers have higher expectations than ever about what they’ll get for their hard-earned dollars.   You can get the inside scoop from customer loyalty experts, Chip Bell and John Patterson, whom will be the guests on the June 22 edition of Economic Perspectives. TO LISTEN TO THIS INTERVIEW CLICK HERE: Chip Bell/John Patterson Interview.

Bell and Patterson have a combined 50 years of experience going into companies like Ritz-Carlton, McDonald’s, Universal Orlando, Harley-Davidson and USAA and reinventing how they handle and communicate with their customers.  They are the authors of TAKE THEIR BREATH AWAY: How Imaginative Service Creates Devoted Customers. Bell and   Patterson say that the key is offering imaginative service – creating one-of-a-kind experiences that turn “just satisfied” customers into fervent lifetime advocates – regardless of the climate or competition.

Some of the issues covered in the interview will include:

• What struggling companies can do now to turn the tide on their shrinking customer base, including how to mobilize customers into a powerful sales force, turn mistakes into devotion-building opportunities, and rebuild trust with lost clients

• How “value-unique” service can help companies grow their business and energize  employees even as tight budgets force them to cut staff and stop costly value-added services

• The essential formula for creating a no-fail execution plan that has insight into client needs, the foresight to manage potential threats before they appear, and a laser spotlight for success

• How social networks like Twitter and Facebook are changing the landscape of customer service, as companies like Southwest react directly to customer Tweets and posts.

Tax Saving Opportunities for Small Businesses from the American Recovery and Reinvestment Act

From the IRS e-news for Small Businesses

The American Recovery and Reinvestment Act (ARRA), enacted in February, created, extended or expanded a variety of business tax deductions and credits. Because some of these changes—the bonus depreciation and increased section 179 deduction, for example—are only available this year, eligible businesses only have a few months to take action and save on their taxes. Here is a quick rundown of some of the key provisions.

Faster Write-Offs for Certain Capital Expenditures

Many small businesses that invest in new property and equipment will be able to write off most or all of these purchases on their 2009 returns. The new law extends through 2009 the special 50 percent depreciation allowance, also known as bonus depreciation, and increased limits on the section 179 deduction, named for the relevant section of the Internal Revenue Code. Normally, businesses recover these capital investments through annual depreciation deductions spread over several years. Both of these provisions encourage these investments by enabling businesses to write them off more quickly.

The bonus depreciation provision generally enables businesses to deduct half the cost of qualifying property in the year it is placed in service.

The section 179 deduction enables small businesses to deduct up to $250,000 of the cost of machinery, equipment, vehicles, furniture and other qualifying property placed in service during 2009. Without the new law, the limit would have dropped to $133,000. The existing $25,000 limit still applies to sport utility vehicles. A special phase-out provision effectively targets the section 179 deduction to small businesses and generally eliminates it for most larger businesses.

Bonus depreciation and the section 179 deduction are claimed on Form 4562. Further details are in the instructions for this form.

Expanded Net Operating Loss Carryback

Many small businesses that had expenses exceeding their incomes for 2008 can choose to carry those losses back for up to five years, instead of the usual two. For small businesses that were profitable in the past but lost money in 2008, this could mean a special tax refund. The option is available for a small business that has no more than an average of $15 million in gross receipts over a three-year period.

This option is still available for most eligible taxpayers, but only for a limited time. A corporation that operates on a calendar-year basis, for example, must file a claim by Sept. 15, 2009. For eligible individuals, the deadline is Oct. 15, 2009.

Eligible individuals should file a claim using Form 1045, and corporations should use Form 1139. Details can be found in the instructions for each of these forms, and answers to frequently-asked questions are posted on IRS.gov.

Exclusion of Gain on the Sale of Certain Small Business Stock

The new law provides an extra incentive for individuals who invest in small businesses. Investors in qualified small business stock can exclude 75 percent of the gain upon sale of the stock. This increased exclusion applies only if the qualified small business stock is acquired after Feb. 17, 2009 and before Jan. 1, 2011, and held for more than five years. For previously-acquired stock, the exclusion rate remains at 50 percent in most cases.

Estimated Tax Requirement Modified

Many individual small business taxpayers may be able to defer, until the end of the year, paying a larger part of their 2009 tax obligations. For 2009, eligible individuals can make quarterly estimated tax payments equal to 90 percent of their 2009 tax or 90 percent of their 2008 tax, whichever is less. Individuals qualify if they received more than half of their gross income from their small businesses in 2008 and meet other requirements. For details, see Publication 505.

COBRA Credit

Employers that provide the 65 percent COBRA premium subsidy under ARRA to eligible former employees claim credit for this subsidy on their quarterly or annual employment tax returns. To help avoid imposing an unnecessary cash-flow burden, affected employers can reduce their employment tax deposits by the amount of the credit. For details, see Form 941. Answers to frequently-asked questions are posted on IRS.gov.

Other ARRA business provisions relate to discharges of certain business indebtedness, the holding period for S corporation built-in gains and acceleration of certain business credits for corporations. Also see Fact Sheet FS-2009-11.

Book Review – Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism

Review By Travis Kent

Kevin Phillips nailed it. During the fall of 2007, Phillips was in the process of writing what would eventually be called Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. The original hardcover edition was released in the Spring of 2008 and his criticism of derivative mortgage products, excessive personal debt as an economic driver and the rise of the financial sector as a major piece of the gross domestic product, would, in less than six months, serve as a haunting premonition of what is now thought of as a global economic crisis. The paperback which was released March 2009 and is the subject of this review, is equipped with a preface that serves as a well deserved, if not subtle, “I told you so.”

Bad Money now serves as an excellent course study in what has led the America and world economy to their current floundering state. Namely, the failures of the Bush and Clinton administrations to hold Wall Street accountable for the products they created and an in depth analysis of how politics has paved the way. Phillips also examines post-9/11 financial policy, the factor of oil in our economy, and makes haunting comparisons between the Internet bubble that burst just after the turn of the millennium and the Housing bubble which has burst right in front of our eyes.

This book can be summed up from its preface as Phillips writes about the rise of the financial sector from roughly 11% of the U.S. gross national product in the 80’s to 20% by 2005. During that same period, manufacturing fell from 25% of GNP to just 12%. Most of all, Bad Money is a history lesson, political expose and staunch warning of things to come all rolled into one. It is not for everyone but its lessons will are sure to enlighten.

Travis Kent is an underwriter in the surety bond industry.

NOTE: Kevin Phillips was interviewed on the April 20 edition of Economic Perspectives. To listen to the interview click here: Kevin Phillips Interview

$3 Billion in Transportation Contracting Opportunities in Texas Focus of March 23 Economic Perspectives

Dr. Tamela Saldana will discuss how small and disadvantaged businesses can pursue contracting opportunities on $3.1 billion in new transportation projects managed by the Texas Department of Transportation (TxDOT) and funded in part by the economic stimulus bill on the March 23 edition of Economic Perspectives.  Saldana, Program Manager for the Business Outreach and Programs Services Office of TxDOT, will provide general information on bidding requirements, the timeline for the letting of the contracts, and the certification process for small disadvantaged businesses.  TxDOT will be holding a Small Business Briefing in Houston on March 27 that will include a workshop with information on contracting opportunities available.

Combining $1.7 billion in funding from the American Recovery and Reinvestment Act, commonly known as the economic stimulus bill, with other sources of funding, TxDOT will be letting contracts for 29 construction projects and 22 roadway and bridge maintenance and rehabilitation projects across the state in 2009 and 2010.  In selecting the projects for economic stimulus funding, priority was given to projects in economically distressed areas and those that maximize job creation and economic benefit.

Tamela Saldana

Saldana manages programs through her office that enhance business development and contracting opportunities for small and minority vendors.  The programs include the LINC Mentor-Protege Program, the Technical Assistance Program, and the One-on-One Vendor Appointment Program.  Her office also sponsors Small Business Briefings, a two day opportunity and networking conference for small and disadvantaged businesses

SBA Will Answer Questions About Credit Crunch Online January 15: Podcast of EP Interview Available at End of Article

By Hopeton Hay

On January 15 the U.S. Small Business Administration’s Web chat series starts the new year with “How Small Businesses Can Deal with the Credit Crunch.”  This Web chat features SBA Associate Administrator for Capital Access Eric Zarnikow who will help small business owners and entrepreneurs get answers to their questions about credit and borrowing and other resources to help them access credit from 12 p.m. to 1 p.m. Central Standard Time.  Participants can join the live Web chat by going online to www.sba.gov , and clicking “Online Business Chat.” Web chat participants may post questions for Zarnikow before the January 15th chat by visiting http://app1.sba.gov/livemeeting/jan09/index.cfm, and posting their questions online.

Eric Zarnikow

“Its really an opportunity for them to ask questions and get advice on what they might want to do to access credit during the capital crunch,” says Zarnikow.

The Web chat addressing the credit crunch could not come at a more propitous time. There was a record decline in the number of SBA loans between fiscal year 2007 and fiscal year 2008.

“What we saw is the loans for the last fiscal year were down about 30 percent in numbers but only about 13 percent in the dollar amount,” explains Zarnikow.

While banks have tightened their credit standards, Zarnikow says the feedback received from banks indicates there are other factors affecting loan volume.  Because of the recession entrepreneurs are less willing to take on debt to either expand or start or acquire a small business.  Zarnikow says also that banks reported that borrowers generally are less credit worthy than they might have been a year ago.

“The small business may not be doing as well or their personal financial situation might not be as strong,” says Zarnikow.

Zarnikow recommends the following strategies for small business owners to improve their chances of obtaining an SBA loan.

1. Make sure you have a well thought out business plan
2. Talk to as many lenders as possible,
3. Talk to other small businesses about what lender they may use and get a referral or recommendation if possible

To listen to the 8 minute Economic Perspectives interview with Zarnikow click here.

Economic Perspectives Jan 12: How Our Unconscious Minds Influence How We Buy

January 12, 2009: Martin Lindstrom, author of Buyology: Truth and Lies About Why We Buy, will discuss the results of a 3 year marketing study focused on how our unconscious minds influence how we buy.  In the book Lindstrom writes, “…if marketers could uncover what is going on in our brains that makes us choose one brand over another —what information passes through our brain’s filter and what information doesn’t–well that would be the key to truly building brands of the future.”

Martin Lindstrom

Among the questions he explores in Buyology:

• Does sex actually sell?
• Despite governmental bans, does subliminal advertising still surround us?
• Can “cool” brands, like iPods, trigger our mating instincts?

As one of the world’s most respected marketing gurus, Lindtrsom advises top executives at companies including the McDonald’s Corporation, Nestlé, Procter & Gamble, Microsoft, The Walt Disney Company, Unilever and GlaxoSmithKline. Martin Lindstrom speaks to a global audience of close to a million people every year. He has been featured in numerous publications, including Wall Street Journal, New York Times, Washington Post, USAToday, Forbes, Fortune, Newsweek, BusinessWeek and TIME and featured on NBC’s TODAY SHOW, ABC News, CNN and BBC, his previous book, BRAND sense, was acclaimed by the Wall Street Journal as one of the five best marketing books ever published. His five books on branding have been translated into twenty-five languages.

Podcast Available: Predatory Lending Focus of December 15 Economic Perspectives

Leslie Parrish, Senior Researcher for the Center for Responsible Lending discussed trends in predatory lending on the December 15 edition of Economic Perspectives, 5:30 p.m. – 6 p.m. on KAZI 88.7 FM. Parrish recently spoke in Austin on payday lending trends at a forum sponsored by PeopleFund. The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated

Leslie Parrish

to protecting homeownership and family wealth by working to eliminate abusive financial practices.

To listen to the interview click here.

Predatory lending is a major problem in Texas, especially payday lending. According to an article published by Don Baylor in the April 2008 edition of the Texas Business Review, The Hidden Costs of Payday Lending , Texans borrow $2.5 billion a year from payday lenders with interest and fees of $500 million to $600 million.

As a Senior Researcher, Parrish analyzes a variety of consumer finance issues, such as payday lending, car title lending, and bank overdraft fees. Previously Parrish was a Senior Policy Analyst in the New America Foundation’s Asset Building program where she worked policies related to savings, asset limits, and financial education.

Recession Basics: Who Decides When A Recession Began & How It’s Defined

By Hopeton Hay

The National Bureau of Economic Research (NBER) announced that the U.S. has been in a recession since December of 2007. According to the NBER the last recession lasted from March 2001 to November 2001. With this recession 11 months old and counting, its the longest one we’ve had since the 16 month recession during the Reagan Administration which lasted from July 1981 – November of 1982.

Now that the official “spokesman” for recession has made this announcement some background information on NBER and how they define a recession is in order.

What is the National Bureau of Economic Research

NBER is a private, non-profit research organization founded in 1920 to promote a greater understanding of how the economy works. The Bureau’s associates focus on empirical research in the areas of statistical measurement, models of economic behavior, the effects of public policy on the U.S. economy, and the effects of alternative policy proposals. Sixteen of the 31 American Nobel prize winners in Economics have been researchers at NBER. It’s governed by a board of directors with representatives from major research universities such as Harvard and Stanford, and a representatives from major national economic organizations such as the American Economic Association and the AFL-CIO.

How Does NBER Define a Recession?

NBER defines a recession as a significant decline in economic activity spread across the economy lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches a trough.

The Bureau first began publishing the dates of business cycles in 1929. The NBER’s Business Cycle Dating Committee, formed in 1978, is responsible for declaring the beginning and end of recessions. The committee relies on a number of monthly economic indicators published by government agencies to maintain a monthly chronology of the business cycle.

Some of you may be wondering why it took so long for this announcement to be made. Yes there has been much speculation in the press that the U.S. is in a recession, but the Business Cycle Committee typically waits 6 to 18 months before declaring when a recession began so that the existence of a recession is not in doubt.

For more information on the NBER and the recession go to www.nber.org/cycles/recession.html

Community Investment Network Featured on November 17 Economic Perspectives

Hank Boerner, chief executive officer of the Governance & Accountability Institute, will discuss the web portal www.communityinvestmentnetwork.org, a site providing a broad array of valuable and timely information on financial resources, tools, and trends for underserved communities and small businesses. 

The Governance & Accountability Institute (GAI) is a global research, news and trend monitoring, editorial services / publishing, analysis, and advisory services organization serving leaders and boards of organizations in the corporate, public and social/institutional sectors.

Hank Boerner

Before joining GAI, Boerner was managing director of Rowan & Blewitt, a global issue and crisis management organization.  He has also served as a board-appointed officer and senior communications manager for the New York Stock Exchange (NYSE), responsible for strategic communication with listed companies, NYSE member firms, institutional and individual investors, US and foreign media, the Congress, and the Securities and Exchange Commission.

Education and Workforce Development Initiative Focus of Nov. 10 Economic Perspectives

Austin community leaders Cloteal Haynes and Steve Swanson will discuss a new initiative to increase the skilled workforce and reduce student dropouts on the November 10 edition of Economic Perspectives, 5:30 p.m. -  p.m. on KAZI 88.7FM.  The Community Leadership And Relationships Initiative For Youth (CLARIFY) will convene November 15, 9 a.m. – 3 p.m. at Eastside Memorial High School at Johnston Campus, 1012 Arthur Stiles.

Cloteal Haynes

According to a statement from the Texas Workforce Investment Council, to successfully compete in the global economy and ensure economic prosperity,  it is necessary to “eliminate the gaps that exist between current education and occupational skills.” 

Haynes and Swanson believe community based leadership and action is the best way to address the issue.  “The process has underscored for me, the miracle that can happen when we take the time to focus on those things which bring us together as a community rather than differences whcih continue to divide us,” said Haynes.

For more information on CLARIFY go to www.clari.org

Cloteal Haynes is managing partner of Hayes-Eaglin-Waters and chairman of the board of directors of PeopleFund.  She has has over 30 years of planning and construction experience and has a masters degree from LBJ School of Public Affairs at The University of Texas at Austin.  She is a graduate of Leadership Austin and a board member of the Austin Black Contractors Association.

Steve Swanson

Steve Swanson has 30 years experience in the design and construction industry as a university instructor, structural engineer, prinicpal in a construction management firm, and as an owner’s representative.  He has been actively involved for 15 years with a number of non-profits and community intiatives addressing education, healthcare, economic development, and social services.