Phoenix Housing Market Facing Low Demand, Mike Orr, WP Carey School of Business

The Phoenix market is facing a housing shortage because relatively few new homes are coming onto the market for sale.  Mike Orr, the Director for the Center for Real Estate Theory and Practice at the WP Carey School of Business, conducted a report indicating the market has become extremely quiet in Phoenix.  

Orr says the Phoenix is facing low demand and low supply and at the moment, the demand is slightly lower than the supply.  If there is to be any pressure, it's for housing prices to go down a bit.  As most sellers aren't inclined to do just that, they are taking them off the market.  

Currently, Orr says only about 13-14% of inventory is going to investors, as opposed to a while back where it was closer to 40%.  While there are still more cash transactions than normal, it's dropped quite a bit from last year.  Part of the reason for the low demand is that people are having trouble qualifying for a mortgage or getting enough money together for the down payment.  Another factor lending to the low demand is the younger generation are not even applying for loans, as they're just happy to rent, so first time home buyers are lower than ever before, Orr adds.

Mike Orr Source: http://my.wpcarey.asu.edu/directory/people/profile.cfm?person=2243011  

Mike Orr

Source: http://my.wpcarey.asu.edu/directory/people/profile.cfm?person=2243011

 

Orr believes the mindset of home buyers has changed, as they're not as enthusiastic and there's not a sense of urgency.  "There is also skepticism whether home ownership is good for your long-term financial health," Orr says and while he doesn't share that skepticism, he can understand why it exists given the recent recession.  

Homebuilders are moving slowly as a result of the slowing market and as such, are scaling back on their permits and rate of building, Orr explains.  He believes that if you're interested in an inventory home, you'd probably be able to negotiate a pretty good deal because of the incentives they're now offering.  There isn't a surplus of new homes, Orr notes, as homebuilders were careful to be sure they didn't overbuild.  Orr points out that the Gilbert area, in particular, has a lot of active builders with similar products, which probably offers home buyers the best chance of negotiating the best deal.  

It's surprised Orr that the supply has not gone up when the demand has been so low and he's watching the quantity of new listings coming along, which has been lower than expected.  Once demand picks up, which Orr is sure it will, Phoenix could find itself in another shortage but right now, with things moving so slowly, predicting what will happen more than a few weeks out will be difficult.   

Mike Orr, the Director for the Center for Real Estate Theory and Practice at the WP Carey School of Business, spoke with Arizona Business News during this interview.  For more on his report on the slowing Phoenix home market, click here.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Arizona Seeing Record Highs in Small Business Growth, With Jim Diffley, IHS

The IHS Small Business Jobs Index is a straightforward compilation of small business employment activity for firms of less than 15 employees and how much they're hiring over the course of a year, 3 months and 1 month.  Phoenix is getting record highs, especially in the small business area, says Jim Diffley, Chief Economist for IHS. 

Jim Diffley IHS Source: nabe.com

Jim Diffley

IHS

Source: nabe.com

On a national level, the small business jobs index is almost at record highs and Phoenix in particular is still bouncing back from the "death of the recession," and the dire picture from 2007-2010, Diffley says. 

Diffley says that if you ask an economist what the growth can be attributed to, they'd probably say the recovery of the housing market, with there being less foreclosures and homes under water and construction back up.  The rest of the economy is significantly strong and  Diffley says that the housing market is a big part of that. 

Jim Diffley is the Senior Director US Regional Economics for IHS.  For more information on the small business jobs index, click here.  He spoke with Arizona Business News during his interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Google Improving Quality on the Web With Panda 4.0, Brian Ledis, Reach Local

Google has recently rolled out Panda 4.0, to improve the quality and relevance of the web pages it displays in its results.  This has had a big impact on many websites and Brian Ledis, Product Manager for Reach Local, a premiere provider of online marketing services for small businesses, talks with Arizona Business News about this update and how businesses can better develop their websites.  

A lot of websites were trying to do link building through press releases and article submissions and they were really hit with the latest Panda update, according to Ledis.  This will affect people's abilities to try and link build through these sites, such as PR Newswire.  Google has fulfilled its promise on shutting down these venues trying to provide link building and traffic.  PR Newswire is now taking steps to improve the quality of their press releases by just allowing one link and doing more manual review.  

Brian Ledis Reach Local Source: linkedin.com

Brian Ledis

Reach Local

Source: linkedin.com

To differentiate high quality from low quality, Google has a list of about 22 points reflecting quality guidelines, going as far as determining if it can be trusted to do a financial transaction.  Characteristics, such as being insightful to the user, the length of the content, whether the page has ads, and trustworthiness, make for a high-quality website, according to Ledis.  Going forward, Google will be providing better notifications and explanations so the problems can be addressed and fixed.  

As the Google algorithm is just a machine, it's not perfect and does get things wrong.  Up until very recently, there was a lot of talk in the industry that Google wasn't doing what they said they'd be doing.  Ledis thinks that things have been tweaked in such a way that they're actually helping.  What Google is getting better at is detecting who's out there abusing and shutting them down.  

Business owners can work with Reach Local to help them consolidate and keep things current or they can do it themselves with all of the tools that are available.  Reach Local offers a website series called Etch, which is a website that Reach Local will set up for a company and turn it over to them.  It's turn-key and can be used to maintain their web presence, update their blog, post reviews.  It can also be used as a CRM tool to send out direct emails to customers, how many users they're getting, categorize leads and follow up with customers.  Reach Local also offers a CO product on top of that which is more of a "do it for me" solution. 

Brian Ledis, is the Product Manager for Reach Local, which specializes in local products based on search marketing, display and search ads, as well as having a line of websites and organic search marketing products.  He spoke with Arizona Business News during his interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Arizona Small Business Employment Growing, Drug Use in Workplace Increasing, ASBA News Update

The Paychex IHS National Small Business Jobs Growth Index remains at record highs, with Washington leading and Arizona showing strong improvement.  Arizona's small business employment advanced in June, increasing to more than a 1/2% during the past month and nearly 3% over the past year.  IHS economist Jim Diffley says the recovery of the housing market is one big factor influencing these factors.  People are dealing less with foreclosed and under-water properties and home construction is starting again, he says.  For more on his interview with Arizona Business News, click here.

With summer underway, one-third of small to medium-sized business owners say they won't be able to take a vacation this year, according to the small business index, conducted by Office Depot.  For those able to get away, the top two elements enabling them to do so include reliable staff to cover for them while away and technology that keeps them connected no matter where they are.  

While drug testing in the workplace gets a lot of media attention, battling workplace drug use has become increasingly difficult.  New research shows that deaths in the U.S. related to opiate analgesic use has increased 313% in the last decade, with Arizona being the sixth highest in the country for prescription drug misuse.  As of 2010, 50% of Arizona adults reported misusing prescription drugs.  To learn more about dealing with drugs in the workplace, visit healthyazworksites.org.  

This news update was provided by Arizona Business News, a featured network of Sequence Media Group.  Arizona Business News is brought to you by the ASBA, Arizona Small Business Association.

Small Business Association Helps Minorities Get Business Loans, With Stephen Hart, SBA, Tucson

A new study shows that minorities face inequality when it comes to access to capital, compared to their white counterparts.  There are some free programs that the U.S. Small Business Assocation has to offer minorities in helping them obtain small business loans.

The primary emphasis is on education and counseling, says Stephen Hart, Office Manager with SBA, in Tucson, Arizona, which prepare a prospective borrower for conversations with the lender.  Through their small business development centers, the goal of SBA is to make sure the borrower can sit down with a lender and have anticipated all of the questions in advance and answer them, giving them a higher likelihood of getting a loan.  

SBA has been doing everything they can in helping minorities start businesses and at their headquarters, there's been a shift in how they're working with the banks behind the scenes after the loan is made.  "We do insist banks use our program if they want our guarantee to ensure the business owner gets the best possible loan from the bank," says Hart.  He adds that both women and minority entrepreneurs are willing to take more risk, given the state of the economy which has prompted more people to seek their own employment.  

In each of SBA's offices across the country, they have lender relation specialists who go out and train the banks, both at the local level and national level.  Hart says they make sure business bankers are aware of their loan program that is beneficial to small businesses. 

Stephen Hart is the Office Manager with SBA, in Tucson, Arizona.  He spoke with Arizona Business News during his interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Need Capital? Try This!, With Seth McCoy, Groundswell, Minneapolis

Seth McCoy Groundswell Source: http://www.groundswellmn.com/

Seth McCoy

Groundswell

Source: http://www.groundswellmn.com/

Groundswell, a struggling coffeehouse in Minneapolis went to its customers to raise money for an expansion.  Instead of traditional equity in the company, owners Seth McCoy and Tim Gilbert asked their customers to buy $1,000 shares to help nearly double the size of their 1,300 square foot coffee shop, which in turn, would get them a free glass of beer or wine each day for the rest of their lives or until Groundswell is no longer in business.  

In purchasing the coffeehouse over five years ago, McCoy's vision was to turn it into a community-based business and he purchased it because he felt that under the previous ownership, there were some bad decisions being made which led to the neighborhood losing out on a vibrant, happening spot.  Utilizing his good relationships with the neighborhood District Council, he met with them and learned of a new trend in business development called "crowd funding."  

The daily sales averages of Groundswell are now seven times what they were before the expansion, according to McCoy.  Part of the expansion included selling beer and wine and in Minneapolis, for that to happen, the establishment had to be a restaurant and to make that happen, they to had expand their bakery items to include other food items.  Even though it wasn't the driving force of the vision in the beginning, it quickly took over because of the talented staff in the kitchen, McCoy says.  

To do the expansion, McCoy and Gilbert needed $150,000-$170,000 and through the expansion, they raised about $30,000 through the membership.  In offering crowd funding, having about 40 people who were committed to the success and having them on board meant more to the business than the initial $30,000 that they got, McCoy says.  

McCoy says the more often these members come in, the better it is for the business because they will bring in friends which will extend their benefit of a free drink every day because the business will thrive.  Most often, those members who do come in rarely just get a drink and leave.  They are sitting down, having a meal and bringing friends with them.

If given the chance to do this again, McCoy says he would and it would be a "no-brainer."  He's learned that if you can survive the first time, then you've built up a body of knowledge in how it's done.

Seth McCoy is owner of Groundswell in Minneapolis.  He spoke with Arizona Business News during his interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Hobby Lobby Wins Contraceptive Ruling, Try This To Raise Capital, ASBA News Update

The U.S. Supreme Court ruled on Monday, in a limited decision, that closely-held for-profit companies can hold religious exemption to the Obamacare requirement that they provide health insurance coverage for contraceptives.  

For-profit corporations, including Conestoga Wood in Pennsylvania, owned by a family of Christians, and Hobby Lobby, a family-owned chain of arts and crafts stores founded on biblical principles, had challenged a provision of the Affordable Care Act.  In an interview with Washington Lee University Health Law Professor Timothy Jost, he says that this will affect a small number of businesses.  "It requires the administration to accommodate their religious beliefs under the Religious Freedom Restoration Act, although I think it's probably a very small number of for-profit businesses."   

Earlier last year, Groundswell, a struggling Minneapolis-St.Paul coffee house, went to its customers to raise money for an expansion, offering something different than traditional equity.  Owners Seth McCoy and Tim Gilbert asked customers to buy $1,000 shares to help nearly double the size of the 1,300 square foot coffee shop.  However, instead of owning part of the business, investors would be entitled to a free glass of wine or beer each day for the rest of their lives, or until Groundswell is no longer in business, whichever comes first.  The plan was to expand into the adjacent vacant space to increase seating capacity and start selling more food, craft beer and wine.  McCoy says the plan was very successful and their daily sales are now "seven times what they were before we put in the expansion."  He says having about 40 people who were committed to the success meant more to the business than the initial $30,000 that they got and it would be a "no-brainer," if he needed to do it again.  For more on his interview with Arizona Business News, click here.

This news update was provided by Arizona Business News, a featured network of Sequence Media Group.  Arizona Business News is brought to you by the ASBA, Arizona Small Business Association.

How to Become a Happier Small Business Owner, With Laura Schaefer

Laura Schaefer Wordchum.com Source: http://www.entrepreneur.com/author/laura-schaefer

Laura Schaefer

Wordchum.com

Source: http://www.entrepreneur.com/author/laura-schaefer

For small business owners, it can be really easy for them to get trapped into the idea that they can multi-task, do more and sleep less, which Laura Schaefer, Writer and Co-Founder of Wordchum.com, says can lead to burn-out.  In talking with dozens of entrepreneurs, a common thread she identified was the need to focus and not say yes to everything.

Schaefer suggests playing to your strengths as an entrepreneur, instead of trying to do everything at one time.  She also suggests that instead of having active accounts on multiple social media outlets, it's best to focus on just one.  In considering what your time is worth, the idea of streamlining things should be approached, such as outsourcing your accounting needs or even cleaning needs.  

The idea of really getting to know people before they are hired is something that Schaefer agrees with, to make sure they share the same goals and passion and conversely, it's a great opportunity to spot any red flags.  

Laura Schaefer is the Co-Founder of Wordchum.com, which is a website where you can upload any type of document and have someone revise it for you, in checking the flow and grammar are correct.  To read more of her article about ways to become a happier small business owner, click here.   She spoke with Arizona Business News during his interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Arizona's Candidates for Governor all Seek to Get Rid of State Income Tax, With Stephen Slivinski, Goldwater Institute

All three candidates running for Governor of Arizona have said they'd do away with state income tax.  Stephen Slivinski, Senior Economist for the Goldwater Institute says that the way the tax system is set up, it can done in a revenue-neutral fashion, meaning if you get rid of income tax, you can expand on sales tax, which would make the state tax system more consumption-based instead of income-tax.  This would mean you're taking taxation off of job creation or investment and not taxing things that are being put into the economy.  By expanding the sales tax rate, they can keep the rate at the same level to all final use goods and services.  It can be structured in such a way that you're raising just as much revenue and doing so in a "less economically distortionary way," he says.

The question, Slivinski says, is whether you include the sales tax base to include food or not and this is where the rebate question comes in.  If you expand the sales tax to food, then you want to find a way to find harmless those in the middle to lower income brackets.  This might be an "imperfect way from shielding people from a certain kind of tax burden," notes Slivinski.  

Stephen Slivinski Goldwater Institute Source: http://goldwaterinstitute.org/stephen-slivinski-0

Stephen Slivinski

Goldwater Institute

Source: http://goldwaterinstitute.org/stephen-slivinski-0

Income taxes by the nature penalize investments and job creation and it saddles the most productive areas of the economy with a form of punitive or double taxation.  Slivinski says Arizona has had a hybrid taxation system for quite some time, as opposed to many other states that are starting to "wise up," such as North Carolina, Kansas and Oklahama, who are starting to look at their income tax systems to make it more consumption-based and less punitive to new investment and job creation.  

While policymakers can't control everything about Arizona, such as the climate, they can control how competitive we are in terms of cost of living and infrastructure, Slivinski says.  He believes any new Governor taking office next year needs some new, fresh thinking, big picture ideas for reforms for Arizona's tax code.  

The general presumption about getting rid of an income tax is the goal of transitioning the state to a more consumption-based form of taxation.  Slivinski says you can also have a flat tax while allowing unlimited exemptions for saving and investing and from an economist's perspective, all that's left is consumption and if you're taxing that at a flat rate across the board, you get to a sales tax through the back door.  This "hybrid system" is different than anything Arizona's done in the past and eliminates some of the political questions.  

 Steve Slivinski, is a Senior Economist for the Goldwater Institute and spoke with Arizona Business News during his interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

No More State Income Tax in Arizona? ASBA News Update

Three candidates vying to become Arizona's next Governor have said if elected, they would do away with state income taxes that currently provide over $4 billion in revenue to Arizona each year. Steve Slivinski, Senior Economist for the Goldwater Institute said he likes the idea and said there are a number of variations that could work.  "The general presumption about getting rid of an income tax is because the goal is to veer or transition the state to a more consumption-based form of taxation," he says.  Slivinski spoke with Arizona Business News and to hear more on his interview, click here.

Last week PayPal launched PassPort, a website designed to educate and empower small businesses with free tools to help expand their global sales.  Melissa O'Malley, PayPal’s Director of Global Merchant and Cross Border Trade Initiatives, says "this is a huge opportunity for merchants."  To hear more of her interview with Arizona Business News, click here.  

This news update was provided by Arizona Business News, a featured network of Sequence Media Group.  Arizona Business News is brought to you by the ASBA, Arizona Small Business Association.

 

Paypal Introduces PassPort to Help Small Business Sell Overseas, With Melissa O'Malley, Paypal

Last week, Paypal launched Passport, a website designed to educate and empower small businesses with free tools to help expand their global sales.  Melissa O'Malley, Paypal's Director of Global Merchants and Cross Border Trade Initiatives, says Passport was designed for businesses wanting to expand their international sales opportunities and the goal is for small businesses to find a peak opportunity outside of their sales borders and tap into this enormous revenue potential.  The website breaks down cultural barriers, untangles the complexities of things like shipping and costs, and how to engage with international shoppers.  

Melissa O'Malley Paypal Source: linkedin.com

Melissa O'Malley

Paypal

Source: linkedin.com

Functioning in 103 markets around the world, Paypal is familiar with cross border trade.  There are over 94 million consumers buying goods on overseas websites, according to O'Malley, and Paypal expects that to grow to 130 million consumers in 2018.  "There is a huge opportunity for U.S. merchants to go out and address that market," she says.  While 80% of online shoppers are looking for good deals, 79% are doing it for variety, so there's a lot of reasons why shoppers are going online.  Paypal wants to be sure U.S. merchants are poised with the right information and tools to take advantage of those international customers, adds O'Malley.

There is a "heat map" on the Passport site that shows you who's buying and selling globally on which days, also noting the dates of major holidays around the world so U.S. merchants can capture revenue on those key days.  

Melissa O'Malley is Paypal's Director of Global Merchants and Cross Border Trade Initiatives and she spoke with Arizona Business News during this interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Wells Fargo Bets $100 Billion on Small Businesses, With Amy Shapira, Wells Fargo

Wells Fargo is making a big bet on small business, to the tune of $100 billion in lending in the next five years.  Wells Fargo Small Business Strategist, Amy Shapira, says that working with small businesses is one of the most important things that they do because America needs small businesses to stimulate growth in the economy.  

Having been the small business lender leader for the past 11 years, Wells Fargo takes small business lending very seriously.  Arizona, in particular, has been leading for the past several years.  Wells Fargo wants to help small businesses through credit and want to demonstrate this through their five year goal of $100 billion in new business loans.  Over the last three years, small business lending has reached $45 billion.  "This is a stretch but we're committed and we know we're going to be able to help so many credit-worthy customers with loans to help them build today, for tomorrow and in the future," Shapira says.

Wells Fargo is also launching something to help small businesses called Wells Fargo Works for Small Business to deliver the wide range of products and resources, so that when a business customer has a question, they're going to have a site to go through for answers.  This guidance will allow them to take the next step toward the goals they've set for themselves.  The $100 billion commitment and this resource will really go together for small businesses, says Shapira.  

Amy Shapira Wells Fargo

Amy Shapira

Wells Fargo

For small businesses, becoming credit-worthy can be a challenge, Shapira says, but Wells Fargo has found that loan approval rates for small businesses are showing improvement and today, they're closer to more normal rates of approval.  Wells Fargo wants to be sure they're there for small businesses who have had a hard time bouncing back from the recession so they don't have to use excess funds to pay down debt.  

99% of employers in the U.S. are from small businesses and 64% of net new private sector jobs are from small business.  Wells Fargo serves one in ten small businesses in America so they feel they know the challenges and questions from working so closely with them and Shapira says that's why they've created the Wells Fargo Works site.

Wells Fargo has a diversity of focus for small business groups, such as the women in small business, and they have a commitment to help them by working with national business and community organizations because they know that's where they're going to help, Shapira says. 

Amy Shapira is a Small Business Strategist with Wells Fargo and spoke with Arizona Business News during this interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

Panda 4.0 Update Makes Quality Content Most Important For Google Search, With Michael Hunter, Infusionsoft

Panda 4.0, released last month by Google was designed to boost good, quality online content in search results.  Michael Hunter, Content Marketing Manager for Infusionsoft, says that it targeted a lot of content farms and guest logging sites that were creating "junk content" just for SEO.  From a small business standpoint, there's not a lot to worry about if you're creating a lot of quality content, he says, and the ones that will see a huge impact from Panda 4.0 are the ones trying to game the system.

Michael Hunter, Infusionsoft Source: attendicon.com

Michael Hunter, Infusionsoft

Source: attendicon.com

It's especially important for small businesses to think about Search Engine Optimization, or SEO, from Google's perspective, as they're trying to get relevant, fresh and current content for their viewers.  In turn, small businesses need to provide that type of content in order to show up in search engines.  "They're taking any wiggle room out of trying to game the system," Hunter says.

When creating content, there are some basic SEO tactics that needed to be implemented, according to Hunter, such as H1 tags and making sure that keywords are in specific places.  For small businesses, Hunter says it's less important to worry about all the changes Google is making and more important to be focusing on creating quality, original content that serves your target market.  That content needs to be amplified to be sure it's seen by your target market.  

Hunter says you can share content through the social channels you find and when it comes to blogging and content on your own web properties, for small businesses it's important to understand that time is of the essence.  It's come down to being very strategic about the timing of the content you create and to make sure that content gets recycled.  For example, when you create an Ebook, it can be turned into several different blog posts, dozens of tweets and dozens of Facebook posts that you can constantly be cycling through.  "You can take one piece of content and make it last a very long time," he adds.  

There will most likely be updating Panda down the road but everything is going towards "quality, quality, quality," so the more you can create quality, relevant content, the better you're going to be, says Hunter and if that approach is taken now, you'll never have to worry about another algorithm update.

Michael Hunter is the Content Marketing Manager for Infusionsoft and spoke with Arizona Business News during this interview.  Arizona Business News, sponsored by ASBAis a featured network of Sequence Media Group.

ASBA News Update, Wells Fargo Bets on Small Business, LLC's Provide Liability Coverage for Small Businesses, ASBA News Update

Wells Fargo, the top small business lender in the U.S., announced a new five year lending goal to provide $100 billion in new small business loans by 2018.  Amy Shapira, from Wells Fargo, says that they understand how important small business is to the economy.  "We know that 99% of U.S. employers are small businesses and 64% of net new private sector jobs are from small business," she says.  She adds that Wells Fargo serves one out of every ten small businesses, so by working so closely with small businesses, they know the challenges they face.  For more on her interview with Arizona Business News, click here.  

Forming your own business can be a very rewarding step and forming your own corporation can help your business gain some very important tax advantages.  A corporation is a separate legal entity able to open up bank accounts, own assets, do business and be taxed separately at corporate rates under its own name.  It also provides liability protection to business owners, investors and shareholders by shielding their personal assets.  David Beauchamp, of Clark Hill PLC, says that "whenever you can have potential liability, we always recommend you use a limited liability entity, so the entity is responsible and not the individual."  These structures, as opposed to sole proprietorship, give the potential of limiting the liability for the owners of the entity.  For more on his interview with Arizona Business News, click here.

This news update was provided by Arizona Business News, a featured network of Sequence Media Group.  Arizona Business News is brought to you by the ASBA, Arizona Small Business Association.

 

Limited Liability Corporation Options for Small Businesses, With David Beauchamp, Clark Hill

When it comes to setting up a corporation, small businesses have several options.  David Beauchamp, Attorney and Corporate Finance Group Specialist with Clark Hill, talks with Arizona Business News about some of these options.  

Setting up your business as a sole proprietorship is best when you're running a business out of your home and third party liability is not an issue, says Beauchamp.  Whenever there's the potential for liability, he always recommends the use of a limited liability entity, so that the entity is responsible, not the individual, such as an S-Corp, C-Corp or an LLC.  Those structures, as opposed to a sole proprietorship, give the potential of limiting the liability of the owners of the entity.  It's also important to understand that it's a separate entity and not the same as their personal checkbook.  

Taxes for a sole proprietorship are on schedule to the person's personal tax returns to the extent you're dealing with an LLC, which can be taxed as a corporation or it can be taxed as an S-Corp.  An S-Corp allows tax losses to flow through the entity to the individual up until the amount the person has invested in the S-Corp.  If an LLC is taxed as a partnership, the losses can flow through without limitations to the individual with the exception of certain non-recourse loans, explains Beauchamp.  

David Beauchamp Clark Hill Source: http://www.clarkhill.com/Attorney/dbeauchamp

David Beauchamp

Clark Hill

Source: http://www.clarkhill.com/Attorney/dbeauchamp

An S-Corp is required to have only certain types of investors, so you're limited to certain trust vehicles.  An S-Corp also has limited flow through tax laws and to the extent you're having significant gain in one year and losses in another year, you can take advantage of flow through.  However, Beauchamp notes, the problem with an S-Corp is that you can only have one class of stock, which means you cannot issue options, everyone has to have the same voting rights, the same ownership percentage based on stocks and that creates problems when trying to bring investors into the entity.  With respect to an LLC that's taxable as an S-Corp, the same problems apply with an LLC that's taxable as a partnership and that structure you can have a class A and a class B.  

Beauchamp says that most investors are much more comfortable in either investing in an S-Corp that can be converted to a C-Corp later or in a straight C-Corp upfront so they can have preferred stock with respect to voting or certain approval rights with respect to liquidation.  

When an LLC is looking to form an S-Corp, it's usually because they're going to be accepting investor money because the investor money will be looking for additional terms and certain rights that a C-Corp can provide that an LLC cannot.  

David Beauchamp, attorney and Corporate Finance Group Specialist with Clark Hill.  He spoke with spoke with Arizona Business News during this interview.  Arizona Business News, sponsored by ASBA and is a featured network of Sequence Media Group.

 

Move Over Arizona Law Now Protects All Motorists, Thanks to AAA, With Michelle Donati, AAA Arizona

Michelle Donati AAA Arizona Source: az.aaa.com

Michelle Donati

AAA Arizona

Source: az.aaa.com

Move Over Arizona, a law enacted in Arizona in 2005, required drivers to move over for emergency vehicles, specifically, police, fire and ambulances.  While this law proved to be effective in protecting those first repsonders, as an advocacy organization, AAA recognized the need to expand this law because they assist 1200 stranded Arizona motorists every day.  

Public Affairs Supervisor for AAA Arizona, Michelle Donati, says that not only did AAA want to protect those motorists, they wanted to protect those drivers assisting those motorists on the side of the road.  This change was enacted in 2011 to expand the law to include any vehicle displaying alternating flashing lights as warning signs on a divided highway or freeway.  It requires drivers to perform a lane change if safely able and if they cannot, they are required to reduce their vehicle speed.  Instead of protecting first responders, this now protects all Arizona motorists.  

AAA wants to be called for help because they recognize that while many people are capable of changing their own tires, it may not be the safest thing for them to do on a highway or freeway, says Donati.

Michelle Donati is the Public Affairs Supervisor for AAA Arizona.  She spoke with Arizona Business News during this interview.  Arizona Business News, sponsored by ASBA and is a featured network of Sequence Media Group.

Why Your Search Rankings May Disappear Soon, ASBA News Update

If you noticed your search rankings have gone down, it may be because Google rolled out its Panda 4.0 update last month. This is Google’s latest attempt to keep low-quality sites from ranking highly in the search results.  In this video, Google engineer Matt Cutts says the reason Panda was released originally was to reward original content.  According to a recent survey by Google and Ipsos, 55% of small businesses still don't have a website, so Panda will not pose a concern for them.

Small business owners may not understand there are many quick & affordable options that make it easier. With companies like Wix, Google, SquareSpace, Wordpress and Weebly, they require no coding or special skills, rather users choose a template, drag & drop photos and paste in text.  Studies show that at the very least a website is necessary for most small businesses because it validates you in your customer's eyes.

Every day, AAA assists more than 1,200 stranded members across the state, and for some, waiting for help alone on the side of a highway can be a scary experience. However, thanks to the “Move Over” bill passed in  2011, this situation may be less intimidating.  Triple A spokesperson Michelle Donati says this law helps keep business fleets safe.  "Instead of protecting first responders, this now protects all Arizona motorists," Donati says.  For more on her interview with Arizona Business News, click here.

This news update was provided by Arizona Business News, a featured network of Sequence Media Group.  Arizona Business News is brought to you by the ASBA, Arizona Small Business Association.

ASBA News Update, Cox Communications Introduces Gigabit Speed in Phoenix, How to Win Business Contracts

Cox Communications announced last week that Phoenix has been chosen as one of the first markets for residential gigabit speeds, as well as doubling speeds for existing customers in its most popular tiers this year.  This increase in internet speed should help small business owners, who work from home, work more efficiently.

For many small businesses, winning contracts is the key to sustaining revenue.  If the only thing a small business is able to offer is price, this can be a difficult thing to achieve, due to multiple competitors all trying to offer the lowest quote.  Additionally, a new business might be willing to lose business just to get in the door.  Brian Lund, Executive Vice President of Ditto Holdings, Inc., says that when your competition is only focused on price, you have an advantage.  By adding other services emphasizing quality or building a surplus, you add powerful motivators in winning the contract.  "Those little things you do above and beyond your competitors, if you can quantify those things and put them into a contract bid, it's going to make you stand out," he says.  For more on his interview with Arizona Business News on how to win business contracts, click here.

This news update was provided by Arizona Business News, a featured network of Sequence Media Group.  Arizona Business News is brought to you by the ASBA, Arizona Small Business Association.

 

Winning Business Contracts Not Just About Price, With Brian Lund, Ditto Trade

Contracts can be beneficial to small businesses because they can guarantee a steady stream of revenue but this can be difficult to achieve due to competing businesses.  Brian Lund, Vice President of Ditto Trade, says there are different ways for businesses to differentiate themselves other than by price and its up to the business to "think outside the box" and figure out what that is.

Brian Lund EVP, Ditto Holdings Source: linkedin.com

Brian Lund

EVP, Ditto Holdings

Source: linkedin.com

"Service doesn't cost as much to the business and product costs as much to the business as the value it has for the customer," Lund says.  Those little things you do above and beyond your competitors, if you can quantify those things and put them into a contract to bid, it will make you stand out and make your customer think you really want to work with them and build a relationship with them.  

Brian Lund is the Co-founder and Executive Vice President of Ditto Holdings, Inc., the parent company of Ditto Trade and Followable .  Click here to read his blog.  He spoke with Arizona Business News during this interview.  Arizona Business News, sponsored by ASBA and is a featured network of Sequence Media Group.



Growth of Women Entrepreneurs, With Susan Duffy, Center for Women's Entrepreneurial Leadership, Babson College

Between 1997 and 2014, the number of women-owned businesses rose by 68%.  Susan Duffy, Executive Director of The Center for Women's Entrepreneurial Leadership at Babson College, attributes this growing trend to a few factors.

For one, Duffy believes the cultural conversation has shifted so that everyone in the U.S. thinks of themselves as a potential entrepreneur.  Through our entire life cycle, we are seeing entrepreneurial opportunities at our fingertips, so that's impacting women as much as men.  

Women are seeing that they can be entrepreneurs as part of a normal career trajectory and with so many women doing, it's a virtuous cycle, Duffy says.  As we see more women role models and see them be successful in finding opportunities where their very unique perspectives help them solve problems, they also see each other be successful, empowering each other along the way.  There are also many developmental, supportive and educational opportunities building up around the woman entrepreneur, she adds.

Susan Duffy Executive Director, Center for Women's Entrepreneurial Leadership, Babson College Source: http://www.babson.edu/Academics/centers/cwel/about/team/Pages/duffy-susan.aspx

Susan Duffy

Executive Director, Center for Women's Entrepreneurial Leadership, Babson College

Source: http://www.babson.edu/Academics/centers/cwel/about/team/Pages/duffy-susan.aspx

With the current tough job market, women considering entrepreneurship might be more inclined to do so now and be more willing to take that chance now, Duffy explains.  When the economy shifts, it does so in a way to make people think about what their possibilities are. "As we build this narrative around what entrepreneurial success looks like, everyone's feeling more confident that now's the time," Duffy says.

Women still face many challenges as entrepreneurs, with gaining access to capital ranking the top of the list, which in itself, is a complex situation.  "There are different types of capital needed at different places along the continuum," explains Duffy, so access to debt capital is always hard for early-stage entrepreneurs.  There are limited opportunities to mid-range capital and the Elizabeth Street Initiative has just been created to offer $50,000-$250,000 to get more of this missing middle need for capital.  

When women get up to the angel adventure stage, women get a much smaller percentage of those investments than their male counterparts, perhaps because their businesses aren't resonating as much as their male counterparts, suggests Duffy.  Venture capitalists don't tend to fund businesses where a lot of women find their interests and the lifestyle and retail types of businesses are "not the types of plays these investors go for," she adds.  Some have even suggested that at the high growth, high tech level, is not very friendly to women and there's some interesting work being done examining this.

Susan Duffy, Executive Director of The Center for Women's Entrepreneurial Leadership at Babson College, spoke with Arizona Business News during this interview.  For more information on the Small Business Optimism Index, click here.  Arizona Business News, sponsored by ASBA and is a featured network of Sequence Media Group.