Central Asia is a dynamic and fast-changing region. Over the past couple of decades, it has shown that increased regional cooperation is indispensable to achieving development goals.
The Central Asia Regional Economic Cooperation program started operations in 2001 and has made significant contributions to the region's growth. The program has grown steadily to 11 member countries and has financed more than $30 billion of investments to enhance transport and energy linkages and boost cross-border trade. Over a third of this amount, or $10.5 billion, has come from the Asian Development Bank, which has supported CAREC since its inception.
Despite their rapid development, countries in the region face significant challenges. The spillover impacts of global economic and financial crisis and of lower oil and gas prices have been acute. Climate change is a major global and regional challenge. These issues do not respect borders and underscore the value of working together to navigate the shifting development landscape.
The CAREC program needs a scaled-up mandate to become more effective and relevant in the years ahead.
Its CAREC 2030 strategy, unanimously adopted on Oct 27 by member countries in Dushanbe, Tajikistan, shows the region is ready to fully achieve its enormous potential by connecting its people, policies, and projects. I see four key ways in which it can create the conditions for future growth, stability, and prosperity.
Firstly, it will deepen support for traditional areas of cooperation, such as transport, energy, and trade facilitation. Regional cooperation cannot be achieved without the basic building blocks of good roads and railways, reliable power supplies, and the ability of businesses to seek new markets.
Infrastructure investments that integrate new technologies, coupled with appropriate regulatory reforms, will help accelerate the region's integration with global value chains and support the adoption of clean and renewable energy.
Secondly, there is a pressing need for macroeconomic policy dialogue among member countries to promote economic and financial stability. The CAREC program has provided a practical and flexible platform for infrastructure investment and policy planning.
Through initiatives such as a planned forum for countries to share experiences on banking and market regulation, CAREC 2030 can also help improve the region's investment climate, sustain economic growth, and manage the impact of cyclical economic downturns.
Thirdly, for Central Asia to truly prosper it must commit to cooperating in new areas. CAREC 2030's support for regional initiatives in tourism, agriculture, water resources, health and education will help countries achieve their sustainable development goals. Deeper cooperation will also help countries reach their targets under the COP21 climate agreement.
Cross-border tourism, value-added agricultural exports, and educational exchanges have tremendous untapped potential in Central Asia. But these can only be unlocked through a regional agenda where countries work together and share expertise.
Finally, development in Central Asia will depend crucially on building the capacities of its own people. Enhancing people-to-people contacts will help deepen intra-regional understanding and increase personal mobility. Enhanced business-to-business contacts are vital to increase private sector development and create jobs.
Greater labor mobility will allow people to improve their skills and obtain new jobs. It is encouraging that CAREC 2030 has embraced in principle a regional labor market information system focusing on skills needs and regional job search and placement, as well as cross-border higher education and technical training.
CAREC's new strategy will enhance its convening power for high-level policy dialogue among ministers and senior officials on key development issues. This dialogue needs to be backed with high-quality research by the CAREC Institute, which recently became an intergovernmental organization, and from member countries and development partners to build capacity in areas including education, health, and financial and economic stability.
The broader scope of CAREC 2030 provides new space for development partners like ADB to further support the region's prosperity. It also opens the prospect of exciting new partnerships with other regional programs such as the Belt and Road Initiative.
ADB will commit $5 billion to support CAREC 2030 in the next 5 years. We have just approved a new $800 million Multi-Tranche Financing Facility for CAREC road corridor development in Pakistan. Next year, we will finance the first phase of the Turkmenistan-Afghanistan-Pakistan transmission line project for $150 million. ADB has also already begun discussions for regional projects in agribusiness, tourism, and railways—areas covered in CAREC 2030.
We seek the strong support of all member countries and development partners for the financing and successful implementation of the new CAREC strategy.
By harnessing the collective energies of CAREC member countries, the new strategy will help the region to capitalize on its unique geographical position and proximity to global markets. There is vast potential to improve connectivity and trade between the region's countries, to Europe and beyond.
CAREC 2030 is an opportunity to promote growth, stability, and prosperity in Central Asia. By working together, countries and development partners can secure the future that the region and its people deserve.
Dec 21, 2017
Nov 18, 2017
Abia seeks cooperation with New York
Abia State Governor Dr Okezie Ikpeazu and his New York State United States (U.S.) counterpart, Andrew Cuomo, met in the U.S. to discussed bilateral cooperation and economic relations between the two states.
The discussion, which held in New York, centered on how such cooperation would positively impact on the Abia economy, and effective harnessing of Abia's natural endowments, creating employment opportunities and external markets for her products, and production of more food for the citizenry.
Cuomo represented by his Director for New Americans, Dr Laura V. Gonzalez-Murphy, told Ikpeazu, who was represented by his deputy Hon. Ude Oko Chukwu, that "We want to equip people to become good entrepreneurs and we advise that Abia state stations somebody here in New York towards enhancing cooperation between our states."
He added that the New York State supports immigration, and thus considers every resident as a member of the New York family, saying "we also provide attorney for any immigrant in need." About 200,000 Abians are said to be resident in New York, some of them have naturalized and became US citizens.
Governor Ikpeazu had long before the meeting, appointed an Aide in the person of Dr Ngozi Ogbonna-Erondu, also in attendance at the meeting, as Coordinator, Abia State Diaspora Brain Trust, "to aggregate the enormous talent of our people who wish to contribute to the development of our state and engage with anybody who wishes to attract any project to the state in any form or manner."
The Governor listed the desired areas of interest for cooperation between Abia State and the New York State as: market for Made in Aba/Abia products, investment in the agriculture, Oil/Gas, large/Medium/Small Scale Enterprises, and Educational Exchange Programmes.
Oct 22, 2017
Albania, China have huge untapped potential in tourism cooperation
TIRANA -- Albania and China have huge untapped potential to cooperate in the tourism sector which has turned into a top priority for Albanian government, Ardit Collaku, general director of Albanian National Tourism Agency (NTA) told Xinhua in a written interview Wednesday.
According to Collaku, Albanian government will pay special importance to the building of infrastructure in order to reach remote areas with high touristic impact as well as build eco-resorts along the coastline.
Therefore, he said Chinese companies had an opportunity to come and invest in this sector.
The director said Albanian government was putting a strong emphasis on the development of the tourism sector, which has big potential for growth.
"Being a strategic sector, Albanian touristic offer ranges from awesome cuisine and gastronomy, historical heritage sites like Apollonia, Berat, Gjirokastra, Butrint, cultural events, awesome coastline with turquoise beaches, hiking trails in the Northern Alps, visiting historical castles and museums and so much more," Collaku said.
According to Collaku, Albania as an emerging market has multiple aspects for visitors to discover, including cuisine, bazaar and castles.
The tourism official says Albanian tour operators are well informed of Chinese tourists tastes, and thus have much touristic attractions to offer to the Chinese market.
"We find their interest towards cultural heritage very appealing for our market where different packages are offered, ranging from visiting UNESCO world heritage sites such as Gjirokastra, Berat, Butrint to indulging yourself in the amazing gastronomy and also the stunning beaches of the Albanian Riviera," Collaku said.
And for Albanian tourists, China is also an appealing destination, which had received many Albanian guests.
Speaking about the fact that last summer season, some Albanian tour operators offered tourist packages to visit China, Collaku considering such offer as very attractive.
According to the NTA director, the packages offered by Albanian tour operators to visit China were welcomed by Albanians as they were at very competitive prices.
"Albania, being an emerging market, is exploring new ways and building bridges with countries which once were thought to be far away are now being seen as very attractive places for incoming and outgoing tourism," the director told Xinhua.
According to Collaku, Albanian government will pay special importance to the building of infrastructure in order to reach remote areas with high touristic impact as well as build eco-resorts along the coastline.
Therefore, he said Chinese companies had an opportunity to come and invest in this sector.
The director said Albanian government was putting a strong emphasis on the development of the tourism sector, which has big potential for growth.
"Being a strategic sector, Albanian touristic offer ranges from awesome cuisine and gastronomy, historical heritage sites like Apollonia, Berat, Gjirokastra, Butrint, cultural events, awesome coastline with turquoise beaches, hiking trails in the Northern Alps, visiting historical castles and museums and so much more," Collaku said.
According to Collaku, Albania as an emerging market has multiple aspects for visitors to discover, including cuisine, bazaar and castles.
The tourism official says Albanian tour operators are well informed of Chinese tourists tastes, and thus have much touristic attractions to offer to the Chinese market.
"We find their interest towards cultural heritage very appealing for our market where different packages are offered, ranging from visiting UNESCO world heritage sites such as Gjirokastra, Berat, Butrint to indulging yourself in the amazing gastronomy and also the stunning beaches of the Albanian Riviera," Collaku said.
And for Albanian tourists, China is also an appealing destination, which had received many Albanian guests.
Speaking about the fact that last summer season, some Albanian tour operators offered tourist packages to visit China, Collaku considering such offer as very attractive.
According to the NTA director, the packages offered by Albanian tour operators to visit China were welcomed by Albanians as they were at very competitive prices.
"Albania, being an emerging market, is exploring new ways and building bridges with countries which once were thought to be far away are now being seen as very attractive places for incoming and outgoing tourism," the director told Xinhua.
Sep 20, 2017
Putin in Tehran hails Iran cooperation on Syria, eyes business
Russian President Vladimir Putin met Iran's leadership Wednesday, with the two Damascus allies pushing a peace deal on Syria and looking to boost business despite US opposition to a landmark nuclear deal.
The Kremlin strongman's first visit to Iran since 2015 comes as Moscow seeks to turn its game-changing military intervention in Syria into a concerted push to bring a halt to fighting in the country with the help of Tehran, President Bashar al-Assad's other key backer.
"We are working very productively with Iran and we manage to coordinate our positions on Syria," Putin said after talks with Iranian counterpart Hassan Rouhani and the Islamic republic's supreme leader Ayatollah Ali Khamenei.
The Russian leader insisted that thanks to a joint push with rebel supporter Turkey, "the situation on the ground in the fight against terrorism and the negotiating process are developing very positively".
Khamenei said the "good cooperation between Tehran and Moscow in Syria shows that the two countries can realise their objectives even in difficult terrain", and insisted that all solutions to the conflict come "from inside the country".
Russia, Iran and Turkey pledged after a latest round of negotiations in Kazakhstan on Tuesday to bring the Syrian regime and its opponents together for a "congress" to push peace efforts in the Russian city of Sochi on November 18.
The three key players have organised a series of peace talks in the Kazakh capital Astana this year, agreeing on the establishment of "de-escalation" zones in various parts of the war-torn country.
Rosneft eyes major projects
Putin's visit -- which in addition involved a three-way summit with Rouhani and the leader of ex-Soviet Azerbaijan Ilham Aliyev -- also followed a hike in tensions over the 2015 Iran nuclear deal after US President Donald Trump refused to certify the agreement last month.
Tehran signed the deal, which saw sanctions lifted in return for limits on Tehran's atomic programme, with six countries including Russia and the United States, and Moscow has slammed Trump's "aggressive and threatening rhetoric" against Iran.
While Putin said only that the two sides had discussed the deal, Russian companies looked to press on with taking advantage of the business opportunities that it has presented.
State oil giant Rosneft and the National Iranian Oil Company signed a roadmap agreement with an eye to developing joint projects worth up to $30 billion, Rosneft head Igor Sechin was quoting as saying by Russian news agencies.
Sechin said the two sides were looking to seal binding deals within a year to work on a "whole series of fields, oil and gas", and that eventual output could total 55 million tonnes of oil a year.
The potentially mammoth deal would boost Rosneft's push in the Middle East and aid the Kremlin's ambitions of bolstering its influence in Iran and the broader region.
Moscow and Tehran have had close political and economic relations, and in the nuclear field Russia has already built one reactor at Iran's Bushehr plant and just started work on two new ones.
Syria peace push
The military might of Moscow and Tehran in Syria has helped prop up Assad's forces and turn the protracted conflict in his favour with a string of key battlefield victories.
Since the start of the year, Russia has looked to cement the gains from its intervention by spearheading the peace push at talks in Kazakhstan, positioning itself as a broker between key players Iran and Turkey and largely bypassing the West.
Up until now the focus has been on quelling the violence on the ground and the three powers have established four "de-escalation zones" around rebel-held territory in the country.
The zones were initially credited for bringing about a significant reduction in bloodshed, but international aid groups say they are currently failing to curb the fighting.
Now Moscow seems keen on expanding its peace drive in search of a political settlement.
The push on Syria comes as ties between both countries and Washington have frayed still further since Trump moved into the White House in January.
Despite initial opposition, Trump in August signed off on a sanctions bill targeting Russia, Iran and North Korea after it was passed overwhelmingly by Congress.
Putin's arrival came a day after the US Treasury added 40 Iranian individuals and entities already targeted by sanctions to a counter-terrorism blacklist.
The Kremlin strongman's first visit to Iran since 2015 comes as Moscow seeks to turn its game-changing military intervention in Syria into a concerted push to bring a halt to fighting in the country with the help of Tehran, President Bashar al-Assad's other key backer.
"We are working very productively with Iran and we manage to coordinate our positions on Syria," Putin said after talks with Iranian counterpart Hassan Rouhani and the Islamic republic's supreme leader Ayatollah Ali Khamenei.
The Russian leader insisted that thanks to a joint push with rebel supporter Turkey, "the situation on the ground in the fight against terrorism and the negotiating process are developing very positively".
Khamenei said the "good cooperation between Tehran and Moscow in Syria shows that the two countries can realise their objectives even in difficult terrain", and insisted that all solutions to the conflict come "from inside the country".
Russia, Iran and Turkey pledged after a latest round of negotiations in Kazakhstan on Tuesday to bring the Syrian regime and its opponents together for a "congress" to push peace efforts in the Russian city of Sochi on November 18.
The three key players have organised a series of peace talks in the Kazakh capital Astana this year, agreeing on the establishment of "de-escalation" zones in various parts of the war-torn country.
Rosneft eyes major projects
Putin's visit -- which in addition involved a three-way summit with Rouhani and the leader of ex-Soviet Azerbaijan Ilham Aliyev -- also followed a hike in tensions over the 2015 Iran nuclear deal after US President Donald Trump refused to certify the agreement last month.
Tehran signed the deal, which saw sanctions lifted in return for limits on Tehran's atomic programme, with six countries including Russia and the United States, and Moscow has slammed Trump's "aggressive and threatening rhetoric" against Iran.
While Putin said only that the two sides had discussed the deal, Russian companies looked to press on with taking advantage of the business opportunities that it has presented.
State oil giant Rosneft and the National Iranian Oil Company signed a roadmap agreement with an eye to developing joint projects worth up to $30 billion, Rosneft head Igor Sechin was quoting as saying by Russian news agencies.
Sechin said the two sides were looking to seal binding deals within a year to work on a "whole series of fields, oil and gas", and that eventual output could total 55 million tonnes of oil a year.
The potentially mammoth deal would boost Rosneft's push in the Middle East and aid the Kremlin's ambitions of bolstering its influence in Iran and the broader region.
Moscow and Tehran have had close political and economic relations, and in the nuclear field Russia has already built one reactor at Iran's Bushehr plant and just started work on two new ones.
Syria peace push
The military might of Moscow and Tehran in Syria has helped prop up Assad's forces and turn the protracted conflict in his favour with a string of key battlefield victories.
Since the start of the year, Russia has looked to cement the gains from its intervention by spearheading the peace push at talks in Kazakhstan, positioning itself as a broker between key players Iran and Turkey and largely bypassing the West.
Up until now the focus has been on quelling the violence on the ground and the three powers have established four "de-escalation zones" around rebel-held territory in the country.
The zones were initially credited for bringing about a significant reduction in bloodshed, but international aid groups say they are currently failing to curb the fighting.
Now Moscow seems keen on expanding its peace drive in search of a political settlement.
The push on Syria comes as ties between both countries and Washington have frayed still further since Trump moved into the White House in January.
Despite initial opposition, Trump in August signed off on a sanctions bill targeting Russia, Iran and North Korea after it was passed overwhelmingly by Congress.
Putin's arrival came a day after the US Treasury added 40 Iranian individuals and entities already targeted by sanctions to a counter-terrorism blacklist.
Aug 25, 2017
How Cuba's growing internet is fuelling new businesses
Bernardo Romero Gonzalez, a 33-year-old software engineer from Cuba, launched his new business this month: a website where people can order island-made products such as soap, bouquets of flowers and cakes for home delivery.
"It's like Amazon for Cuba, but with a difference," he told an audience of New York techies at a conference this month.
The summary was a classic start-up pitch, but it also underscored the obstacles when it comes to starting an online business in the Caribbean country.
Mr Gonzalez is counting on buyers from the Cuban diaspora, which already plays a role in the economy, sending money and other products to the island.
But the infrastructure doesn't exist for domestic buyers to sustain the market.
Growing internet
Internet access among Cuba's 11.2 million people is growing.
Between 2013 and 2015, the share of the Cuban population using the internet jumped from about a quarter to more than 35%, according to estimates from the International Telecommunications Union.
The growing market has helped draw the attention of internet giants, such as Airbnb, Netflix and Google, which installed servers on the island and started hosting data there last month.
The rise is also fuelling activity among local entrepreneurs, who are launching domestic versions of sites such as the crowd-review business directory Yelp.
But there's a long way to go.
'Third world conditions'
Less than 6% of Cuban households had internet access at home in 2015, one of the lowest rates in the western hemisphere, according to the ITU. (In the UK, that figure tops 91%.)
Wi-fi hotspots in parks and other public places operated by the state-run telecom company remain the primary way to log on.
Service at the hotspots is often slow, expensive and selective, with the government restricting access to the full range of internet sites.
The constraints are shaping the emerging Cuban start-ups.
At this month's TechCrunch conference in New York, Mr Gonzalez shared a stage with Kewelta, a firm focusing on advertising within decentralised online and offline networks, and Knales, which provides updates on weather, news and other events via text messages and phone calls.
Knales co-founder Diana Elianne Benitez Perera told the audience that "Cubans are disrupters by definition. We always find the way to have first world conditions with third world conditions."
'Change in the air'
The government in recent years has taken some steps to boost internet access, increasing wi-fi hotspots in parks and other places, lowering prices and experimenting with home installations.
The measures come amid broader economic changes in Cuba, after the Castro regime loosened rules for private enterprise and the Obama administration eased the US embargo, unleashing large numbers of US travellers.
The Cuba Emprende Foundation started working with the Catholic Church in Cuba about five years ago as the reforms started, funding four-week courses in entrepreneurship from which more than 3,000 people have graduated.
The Foundation helped organise the 10x10KCuba start-up competition in which both Diana and Bernardo participated last year, that led to the invitation to the Tech Crunch conference in New York in May.
"There's change in the air," says Anna Maria Alejo, one of the people who helped organise the TechCrunch panel and helped raise about $10,000 (£7,700) to pay for eight entrepreneurs to attend the conference.
"We're not exactly sure where things will go, but there's a lot of optimism among these young people," she says.
'Workarounds'
Cuba has a relatively high number of well-trained software engineers, especially for a country with its size and degree of internet access, said Kirk Laughlin, managing director of NearShore Americas.
The media advisory company published a report in 2015 that highlighted the island's potential as a hub for cheap IT labour.
But Mr Laughlin says he's been disappointed by how slowly the Cuban government has moved to improve the broadband network, especially given interest from international companies and numbers of educated Cubans opting to leave and take their chances elsewhere.
"There is such an opportunity to leapfrog ahead and really light up the island with really robust broadband. That is just not happening," he says.
"When it comes to online start-ups, there's a lot of workarounds".
"That's great that people have the ingenuity and creativity and in some ways we should applaud that," he says.
"But it's still a long way to go to get into the league that Cuba has great qualifications to participate in."
'The companies are waiting'
Some say the changes could accelerate after Raul Castro retires next year.
In speeches, Mr Castro's presumed successor, vice president Miguel Diaz-Canel, has indicated a more open attitude, said Larry Press, a professor emeritus at California State University Dominguez Hills, who has researched the internet in the developing world and writes a blog on Cuba.
Mr Press said media recently praised Revolico, a Craigslist-like site that was blocked by the government after its launch in 2007. More recently, it has been celebrated and has inspired competitors.
But those steps aside, a lot of work remains, he says.
"Those indicate a change of attitude, not a giant change of reality."
Mr Gonzalez, who has also started computer repair and web development businesses, said he thinks the moment for Cubazon is now, while shipping to Cuba from the US remains limited.
He and the staff from his current business are working to sign up more businesses to sell their wares on Cubazon.
Many of the people he's talking to don't have an online presence, he says, but can see the possibility: "The companies are waiting for us."
Still, he adds, his primary focus for the moment is a basic one: "My goal currently is working."
Jul 19, 2017
Small business: Why Soccer Shots’ owner chose to franchise
It didn't come as a surprise when Soccer Shots owner Jeremy Sorzano started a business teaching kids how to play soccer. He was a defender on the Charlotte Eagles Soccer Club from 1996-2003.
Sorzano, 43, like most of the Eagles players, supplemented his income by running soccer camps and clinics for children. In 1997, Sorzano realized that offering elective soccer instruction at childcare facilities across Charlotte was an untapped niche market.
Soccer Shots, a program for children, ages 2-8, introduces soccer to young children. It also helps out parents who may not have the opportunity to bring their child to another location for a soccer program.
In 2005, Soccer Shots started to franchise. Sorzano owns Soccer Shots Charlotte with Dustin Swineheart and Matt Uher. Sorzano and three other partners own the franchised branch of the business. Currently, they have 110 owners in 180 territories, including one in Canada.
Sorzano spoke to CharlotteFive for the Small Business Series:
Why did you decide to franchise?
"I was running the local business here in Charlotte. As it was growing, my friend and business partner introduced Soccer Shots up in Harrisburg, Pennsylvania. We were both running a program, and a few friends wanted to do the same thing in the cities they live.
"In order to do that, we decided to franchise. Just like with any franchise, they get to use our name, the curriculum and the marketing materials we produce."
What makes Soccer Shots different from other similar programs?
"One is obviously the curriculum. We tailor the sessions to the various age groups we serve. Our goal is for children to find success and hopefully fall in love with soccer and want to continue to play.
"We also work hard to communicate with parents. We send session summaries home with (the) skill of the day and the character word we taught so parents are aware of what their child is learning."
How important are the coaches to your business?
"Soccer Shots actually pays all of our coaches. With that comes about 20 hours of training. Then we try to monitor how they are doing and make sure we have coaches that know how to work with those age groups and that they are fun and energetic.
"We are serious about finding coaches who really want to have an impact on children and are committed to being prepared and deliver a great experience."
Soccer Shots has several owners. How do you manage these business relationships?
"There are some pretty sobering stats out there showing that most partnerships don't last. They take work. Maybe it's a little bit like a successful marriage. It takes communication, it takes being honest, knowing your goals and making sure that you clearly define who is responsible for what parts of the business.
"I think you have to be able to step back and let people do their job."
What do you do for fun?
"I've got twin 3-year olds. My fun these days is spending time with my wife and them and watching them grow up. We are hoping to get them more interested in hiking and camping, which we really enjoy doing. But that's a work in progress."
Sorzano, 43, like most of the Eagles players, supplemented his income by running soccer camps and clinics for children. In 1997, Sorzano realized that offering elective soccer instruction at childcare facilities across Charlotte was an untapped niche market.
Soccer Shots, a program for children, ages 2-8, introduces soccer to young children. It also helps out parents who may not have the opportunity to bring their child to another location for a soccer program.
In 2005, Soccer Shots started to franchise. Sorzano owns Soccer Shots Charlotte with Dustin Swineheart and Matt Uher. Sorzano and three other partners own the franchised branch of the business. Currently, they have 110 owners in 180 territories, including one in Canada.
Sorzano spoke to CharlotteFive for the Small Business Series:
Why did you decide to franchise?
"I was running the local business here in Charlotte. As it was growing, my friend and business partner introduced Soccer Shots up in Harrisburg, Pennsylvania. We were both running a program, and a few friends wanted to do the same thing in the cities they live.
"In order to do that, we decided to franchise. Just like with any franchise, they get to use our name, the curriculum and the marketing materials we produce."
What makes Soccer Shots different from other similar programs?
"One is obviously the curriculum. We tailor the sessions to the various age groups we serve. Our goal is for children to find success and hopefully fall in love with soccer and want to continue to play.
"We also work hard to communicate with parents. We send session summaries home with (the) skill of the day and the character word we taught so parents are aware of what their child is learning."
How important are the coaches to your business?
"Soccer Shots actually pays all of our coaches. With that comes about 20 hours of training. Then we try to monitor how they are doing and make sure we have coaches that know how to work with those age groups and that they are fun and energetic.
"We are serious about finding coaches who really want to have an impact on children and are committed to being prepared and deliver a great experience."
Soccer Shots has several owners. How do you manage these business relationships?
"There are some pretty sobering stats out there showing that most partnerships don't last. They take work. Maybe it's a little bit like a successful marriage. It takes communication, it takes being honest, knowing your goals and making sure that you clearly define who is responsible for what parts of the business.
"I think you have to be able to step back and let people do their job."
What do you do for fun?
"I've got twin 3-year olds. My fun these days is spending time with my wife and them and watching them grow up. We are hoping to get them more interested in hiking and camping, which we really enjoy doing. But that's a work in progress."
Jun 21, 2017
An unacceptable price for low business taxes
Supply-side theory insists that reduced corporate taxation equals increased productive investment and long-term wage growth, but where is the evidence for this outcome? The "competitively" lower taxed UK has seen slower improvements in productivity than Germany, France, Sweden, Norway or the US, which retains the highest corporation tax of all. British business expenditure on R&D as a proportion of GDP has declined in the last decade and the UK has suffered a historic drop in real wages. In an era of unprecedented corporate profits and high cash holdings the evidence for the redundancy of tax relief is remarkable: UK corporate tax cuts have apparently translated straight into higher shareholder payouts and share repurchases to further inflate the share price: ie they have been absorbed into the prevailing US and UK dynamic of financial value extraction that underpins the escalating wealth of the 1%, not an investment dynamic.
Investment funds typically consider a dividend payout ratio (the relationship of payout to earnings) of over 55% as indicating a drain on long-term earnings potential and unsustainable. By August 2016 the ratio for the FTSE 100 stood at 107%.
Large corporations may decry Labour's tax policy but the OECD evidence is that firms intent on long-term investment (rather than, say, mergers and acquisitions to secure tax breaks) are primarily concerned with the skills base, infrastructure and R&D. Labour's corporate tax policy is essential not just to help pay for this human and fixed capital investment but to wean large UK firms off the crack of wealth extraction and back to wealth creation.
May 22, 2017
Why Building a Consulting Business Is Harder Than It Initially Seems
If you've experienced difficulty building up a consulting business, you aren't alone. The number of consultants in the United States has grown every year since 2012, reaching more than 637,000 in 2016. So, it's unlikely that every one of these people will achieve succcess.
The turnover rate for consultants is also high compared to industry averages, yet it remains a popular choice for new entrepreneurs due to its perceived simplicity. To be a consultant, you don't need to invest in heavy machinery; you don't need to buy a franchise; and you may not even need to build a brand or get an office -- you just put our your shingle and charge money to give people advice.
But once you do get started as a consultant, you'll likely discover things aren't quite as simple as they initially seemed. So, what are some reasons for that? Why is consulting so much harder than you'd imagined?
Consulting complications
These are some of the biggest complicating factors in consulting:
1. The need for results
If you want to get and keep clients, you'll need to prove that you're worth what they're paying you. As consulting maverick Sam Ovens told The Epoch Times: "Helping clients get customers is absolutely the most important thing."
In short, you may be able to give your clients good advice, but if they can't see that advice translating into bottom-line revenue, they aren't going to keep you around. What's worse: if you aren't able to prove results with your first few clients, no new clients will want to hire you. Your consulting business needs to come out of the gates strong, with a results-oriented process that proves your worth.
2. Underestimation
Another problem in setting yourself up as a consultant is the perceived simplicity of the consulting model. It's true that consulting businesses don't require much startup capital (depending on your niche), and that anyone with experience in a given industry can technically qualify as a consultant, but that doesn't translate to early success in the consulting world.
You'll need to create a formal business plan, as with any other business, and to think carefully about the services you'll provide, your marketing and sales strategy and how you're going to scale.
3. Competition
Remember those 637,000 consultants already mentioned? They are your competition. Businesses looking for consultants have access to an enormous talent pool, with specialists and generalists to be found all over the country. What's more, they cover all price ranges and almost every conceivable need.
So, if you don't have a way to differentiate yourself, you're going to be lost amid the white noise.
4. Risk tolerance
There are tried-and-true ways to start a consulting business, and they're relatively easy to follow. The conventional path has proven fruitful for thousands of consulting entrepreneurs in the past, and will be for countless entrepreneurs in the future.
But building a business that follows the traditional model isn't necessarily the best approach. Instead, it's often better to take a risk and pursue a new angle, or think about consulting in a new way; it's riskier, so fewer entrepreneurs choose this path, but it will make you stand out.
5. Audience-targeting
Business author Orvel Ray Wilson once said that, "Customers buy for their reasons, not yours." And there's a lesson there.
When most professionals start thinking about consulting, it's for self-centered reasons. They think about the skills they have, the experiences they've gained and what they could do for potential customers. On the surface, there's nothing wrong with this, but you need to reverse your thinking if you want to succeed.
Don't think about what you want to do. Instead, think about what customers will need you to do. Target the audience members you can serve best, and pitch to them in a way that they'll find valuable.
6. Pricing
Price ranges for consultants are all over the place, ranging from less than your old salary to $1,000 an hour or more. So, setting the right price point is key, if you want to succeed; the problem is,there's no surefire calculation that can help you do that.
Clearly, setting the price too high will scare away potential customers, but setting it too low could make you seem inexperienced. On top of that, you'll need to consider your profitability, and that means estimating not only the value of your time, but the extra costs it takes to run your business.
7. Reputation
Much of your consulting success will boil down to your reputation in the industry. If you try to start a business before you've made a name for yourself, you'll fight an uphill battle to try to develop yourself at the same time that you're building your client base.
Without having a pre-existing reputation, you'll find that the effort to secure those first few clients is brutal.
Taking the first step
Despite the unique challenges it presents, the consulting industry is not an unapproachable one. Most of these obstacles present themselves in the earliest stages of your business's development, so if you're prepared enough to get past them, you'll be able to build enough momentum to keep your company alive for years.
But once you do get started as a consultant, you'll likely discover things aren't quite as simple as they initially seemed. So, what are some reasons for that? Why is consulting so much harder than you'd imagined?
Consulting complications
These are some of the biggest complicating factors in consulting:
1. The need for results
If you want to get and keep clients, you'll need to prove that you're worth what they're paying you. As consulting maverick Sam Ovens told The Epoch Times: "Helping clients get customers is absolutely the most important thing."
In short, you may be able to give your clients good advice, but if they can't see that advice translating into bottom-line revenue, they aren't going to keep you around. What's worse: if you aren't able to prove results with your first few clients, no new clients will want to hire you. Your consulting business needs to come out of the gates strong, with a results-oriented process that proves your worth.
2. Underestimation
Another problem in setting yourself up as a consultant is the perceived simplicity of the consulting model. It's true that consulting businesses don't require much startup capital (depending on your niche), and that anyone with experience in a given industry can technically qualify as a consultant, but that doesn't translate to early success in the consulting world.
You'll need to create a formal business plan, as with any other business, and to think carefully about the services you'll provide, your marketing and sales strategy and how you're going to scale.
3. Competition
Remember those 637,000 consultants already mentioned? They are your competition. Businesses looking for consultants have access to an enormous talent pool, with specialists and generalists to be found all over the country. What's more, they cover all price ranges and almost every conceivable need.
So, if you don't have a way to differentiate yourself, you're going to be lost amid the white noise.
4. Risk tolerance
There are tried-and-true ways to start a consulting business, and they're relatively easy to follow. The conventional path has proven fruitful for thousands of consulting entrepreneurs in the past, and will be for countless entrepreneurs in the future.
But building a business that follows the traditional model isn't necessarily the best approach. Instead, it's often better to take a risk and pursue a new angle, or think about consulting in a new way; it's riskier, so fewer entrepreneurs choose this path, but it will make you stand out.
5. Audience-targeting
Business author Orvel Ray Wilson once said that, "Customers buy for their reasons, not yours." And there's a lesson there.
When most professionals start thinking about consulting, it's for self-centered reasons. They think about the skills they have, the experiences they've gained and what they could do for potential customers. On the surface, there's nothing wrong with this, but you need to reverse your thinking if you want to succeed.
Don't think about what you want to do. Instead, think about what customers will need you to do. Target the audience members you can serve best, and pitch to them in a way that they'll find valuable.
6. Pricing
Price ranges for consultants are all over the place, ranging from less than your old salary to $1,000 an hour or more. So, setting the right price point is key, if you want to succeed; the problem is,there's no surefire calculation that can help you do that.
Clearly, setting the price too high will scare away potential customers, but setting it too low could make you seem inexperienced. On top of that, you'll need to consider your profitability, and that means estimating not only the value of your time, but the extra costs it takes to run your business.
7. Reputation
Much of your consulting success will boil down to your reputation in the industry. If you try to start a business before you've made a name for yourself, you'll fight an uphill battle to try to develop yourself at the same time that you're building your client base.
Without having a pre-existing reputation, you'll find that the effort to secure those first few clients is brutal.
Taking the first step
Despite the unique challenges it presents, the consulting industry is not an unapproachable one. Most of these obstacles present themselves in the earliest stages of your business's development, so if you're prepared enough to get past them, you'll be able to build enough momentum to keep your company alive for years.
Apr 20, 2017
6 Ways to Market Your Franchised Business
If you think of marketing as a building, the pillars that give marketing structure are advertising, direct mail, sales, promotions, public relations and online marketing. The most successful franchisors have been able to break down the six pillars of marketing, assign the appropriate resources, track their return on investment and continue to fine-tune and adapt as the results vary. Following are the most important aspects of these pillars.
1. Advertising
You may think of advertising as print media only. The truth is, advertising encompasses any media that allows you to purchase space to promote your marketing message. This includes print advertising such as magazines, newspapers and other printed formats, TV advertisements, radio advertisements, billboards, and now, with the onset of technology, internet advertisements, websites and more.
Although franchise advertising has been around for decades, today's advertisements tend to have a much different call to action that those of the past. Instead of the standard “Call Now,” ads direct viewers to a franchisor's website where they can learn more and engage via email with the franchisor's development department.
Franchisors who create innovative advertising campaigns across all platforms realize the best return on investment (ROI).
2. Direct mail
Most of us think of direct mail as postcards that we receive in our mailbox. This is still an effective option depending on the strength of the message and the offer. With the onset of technology, other direct mail options are e-newsletters, drip email campaigns (a series of email messages sent to a prospect over a short period of time) and other opt-in alternatives that send information via the internet.
3. Sales
An effective sales process is a must for every franchise system. It's imperative for every franchisor to have a systematic, step-by-step discovery process for their prospective franchise buyers to follow. This process should be simple to understand, since the prospective franchisee needs to have the information presented to them in such a way that they can absorb it, weigh the pros and cons and eventually make an educated decision. Methods of sales in the franchise world break down into the following sub-categories:
Person-to-person sales that you might experience at a tradeshow, discovery day or other discovery experience that the franchisor participates in.
Phone sales that take place on either an outgoing or incoming basis. It's important as a franchisor to have a designated in-house franchise sales expert who is trained in the entire franchise process so this person can present the opportunity to the prospective franchisee effectively, answer questions and handle objections.
Outgoing phone sales, sometimes called telemarketing, can also be effective. It is far more challenging today to launch an effective telemarketing campaign due to caller ID, do-not-call lists and voicemail. The important element of outgoing phone sales is to ensure that you are offering the franchise buyer information that is important to them and that provides them with an incentive to continue the discovery process with you.
Technology has expanded the sales process. Email, texting, web presentations and calendar syncing are as much a part of the franchise sales process as any traditional sales tool.
You will find that the best candidates will follow your discovery steps, will seldom miss appointments and will quickly get back to you when you leave messages. This is a good indicator of their ability to follow a system and of their enthusiasm and interest in your franchise concept. It also gives you an idea of their potential to be a successful business owner. One powerful tool is to utilize franchise-specific contact relationship management (CRM) software to keep track of your franchise prospects and their progress as they move through your sales pipeline.
4. Promotions
Traditionally promotions have been used to spark awareness and excitement in a marketing message. You've seen promotions like midnight madness sales, 24-hour sales, sweepstakes, giveaways, special events, customer appreciation dinners -- or any kind of special, out-of-the-ordinary promotion that's utilized by various companies to attract new buyers or existing buyers back again. Successful franchisors use a combination of traditional promotions and promotions that utilize new technologies. For instance, they may hold a sweepstakes advertised in traditional media such as print, billboards, radio and TV while also running the promotion on Facebook, Twitter and other social media outlets. The internet options have given franchisors a low-investment way to reach masses of prospective buyers, allowing the smaller brand franchises to compete favorably with the bigger brands.
5. Public relations
Public relations may be the most underused pillar of marketing. Traditionally, public relations campaigns would consist of press releases, press kits, sponsorships and other goodwill events and campaigns that would usually bring brand awareness through publicity. In the internet age, we have found that public relations is still a very viable and important pillar that needs attention. However, the delivery has changed considerably, and in some ways technology has made it far easier to launch a successful PR campaign.
An example of this may be a press release that in years past would have to be printed, put into a press kit and mailed to 100 or 200 news and other media outlets hoping that the individuals at those outlets would find it interesting enough to write it into an article or a category of one of their existing articles or stories. It was difficult to measure success with this technique.
Today, successful franchisors enjoy the ability to release their newsworthy articles via blogs and on industry and business startup blog platforms. In most cases this is free, and the more creative and informational the articles are, the more traffic they will draw. This method is also measurable since the analytics can be evaluated at the franchisor level and fine-tuned.
6. Online marketing
Many franchisors are still pretty new at online marketing -- this gives new franchisors with strong online marketing skills an advantage. Not too many years ago, the “big boys,” or well-known franchisors, had the advantage because they had far more money and resources to market their franchise opportunities. Back then, the marketing and media options were very expensive, and the new emerging franchisors were priced out of the competition. The internet has now leveled the playing field because the barriers of entry are lower, giving creativity and not big marketing budgets, the advantage.
1. Advertising
You may think of advertising as print media only. The truth is, advertising encompasses any media that allows you to purchase space to promote your marketing message. This includes print advertising such as magazines, newspapers and other printed formats, TV advertisements, radio advertisements, billboards, and now, with the onset of technology, internet advertisements, websites and more.
Although franchise advertising has been around for decades, today's advertisements tend to have a much different call to action that those of the past. Instead of the standard “Call Now,” ads direct viewers to a franchisor's website where they can learn more and engage via email with the franchisor's development department.
Franchisors who create innovative advertising campaigns across all platforms realize the best return on investment (ROI).
2. Direct mail
Most of us think of direct mail as postcards that we receive in our mailbox. This is still an effective option depending on the strength of the message and the offer. With the onset of technology, other direct mail options are e-newsletters, drip email campaigns (a series of email messages sent to a prospect over a short period of time) and other opt-in alternatives that send information via the internet.
3. Sales
An effective sales process is a must for every franchise system. It's imperative for every franchisor to have a systematic, step-by-step discovery process for their prospective franchise buyers to follow. This process should be simple to understand, since the prospective franchisee needs to have the information presented to them in such a way that they can absorb it, weigh the pros and cons and eventually make an educated decision. Methods of sales in the franchise world break down into the following sub-categories:
Person-to-person sales that you might experience at a tradeshow, discovery day or other discovery experience that the franchisor participates in.
Phone sales that take place on either an outgoing or incoming basis. It's important as a franchisor to have a designated in-house franchise sales expert who is trained in the entire franchise process so this person can present the opportunity to the prospective franchisee effectively, answer questions and handle objections.
Outgoing phone sales, sometimes called telemarketing, can also be effective. It is far more challenging today to launch an effective telemarketing campaign due to caller ID, do-not-call lists and voicemail. The important element of outgoing phone sales is to ensure that you are offering the franchise buyer information that is important to them and that provides them with an incentive to continue the discovery process with you.
Technology has expanded the sales process. Email, texting, web presentations and calendar syncing are as much a part of the franchise sales process as any traditional sales tool.
You will find that the best candidates will follow your discovery steps, will seldom miss appointments and will quickly get back to you when you leave messages. This is a good indicator of their ability to follow a system and of their enthusiasm and interest in your franchise concept. It also gives you an idea of their potential to be a successful business owner. One powerful tool is to utilize franchise-specific contact relationship management (CRM) software to keep track of your franchise prospects and their progress as they move through your sales pipeline.
4. Promotions
Traditionally promotions have been used to spark awareness and excitement in a marketing message. You've seen promotions like midnight madness sales, 24-hour sales, sweepstakes, giveaways, special events, customer appreciation dinners -- or any kind of special, out-of-the-ordinary promotion that's utilized by various companies to attract new buyers or existing buyers back again. Successful franchisors use a combination of traditional promotions and promotions that utilize new technologies. For instance, they may hold a sweepstakes advertised in traditional media such as print, billboards, radio and TV while also running the promotion on Facebook, Twitter and other social media outlets. The internet options have given franchisors a low-investment way to reach masses of prospective buyers, allowing the smaller brand franchises to compete favorably with the bigger brands.
5. Public relations
Public relations may be the most underused pillar of marketing. Traditionally, public relations campaigns would consist of press releases, press kits, sponsorships and other goodwill events and campaigns that would usually bring brand awareness through publicity. In the internet age, we have found that public relations is still a very viable and important pillar that needs attention. However, the delivery has changed considerably, and in some ways technology has made it far easier to launch a successful PR campaign.
An example of this may be a press release that in years past would have to be printed, put into a press kit and mailed to 100 or 200 news and other media outlets hoping that the individuals at those outlets would find it interesting enough to write it into an article or a category of one of their existing articles or stories. It was difficult to measure success with this technique.
Today, successful franchisors enjoy the ability to release their newsworthy articles via blogs and on industry and business startup blog platforms. In most cases this is free, and the more creative and informational the articles are, the more traffic they will draw. This method is also measurable since the analytics can be evaluated at the franchisor level and fine-tuned.
6. Online marketing
Many franchisors are still pretty new at online marketing -- this gives new franchisors with strong online marketing skills an advantage. Not too many years ago, the “big boys,” or well-known franchisors, had the advantage because they had far more money and resources to market their franchise opportunities. Back then, the marketing and media options were very expensive, and the new emerging franchisors were priced out of the competition. The internet has now leveled the playing field because the barriers of entry are lower, giving creativity and not big marketing budgets, the advantage.
Mar 23, 2017
4 Ways Trump Could Change Your Business Taxes
In a small town in northern Michigan, Daniel Walsh, the CEO of Purebacco USA, has been spending a lot of time analyzing his company's taxes. Besides state and federal taxes, the Gaylord, Michigan-based vaping-components manufacturer pays use taxes, interstate taxes, payroll taxes, import taxes, property taxes, business-property-use taxes, and out-of-state purchase taxes. Tack on tax compliance and administration costs, and he can kiss 60 cents on every dollar of profit goodbye--and that doesn't even include sales taxes, which he says amount to another 6 to 10 cents.
"When you hit that 90 percent tax level, there is just not that much incentive to doing business," says Walsh, whose company landed at No. 169 on the 2016 Inc. 5000 list of the fastest-growing private companies in America. "We're really not far from that."
So President Donald Trump's promise to slash the federal corporate tax rate is welcome news. "Tax is a big deal to us," says Walsh, whose 12-person company brought in $3.1 million in revenue in 2015. "We've been pulling back one region at a time since the business climate is so hostile."
Like Walsh, business owners across the U.S. are following Trump's tweets, speeches, and executive orders closely--eager for any indication that he'll make good on campaign promises to cut the federal corporate tax rate in half.
In a recent discussion with airline CEOs, Trump noted that there would be an announcement that would be "phenomenal in terms of tax" in the next two to three weeks.
While details are thin, if it's anything like what Trump put forward on the campaign trail, chances are good that as many businesses will be pleased as are dissatisfied--and you'll need to potentially make major course corrections to your business as a result.
"Doing large-scale tax reform is still a difficult thing, and it does involve winners and losers," says Joseph Rosenberg, a senior research associate at the Urban-Brookings Tax Policy Center, a nonpartisan tax-policy research organization in Washington, D.C.
Here's a look at four key ways your business's taxes could change, for better or worse.
1. Your tax bill could drop, or not
The president has, at various points on the campaign trail, called for lowering the federal corporate tax rate to 15 or 20 percent from the upper-level range of 35 percent. And while he has said the measure would apply to all businesses, both small and large, it's not yet clear if pass-through entities like LLCs and S Corps will be included. Most small businesses are structured as pass-through entities, which means a business's income is taxed on an owner's individual return.
The president may choose to favor a plan put forward last year by House Speaker Paul Ryan (R., Wisconsin) and Ways and Means Committee Chairman Kevin Brady (R., Texas). That proposal, named A Better Way, offers to create a separate low tax rate of 25 percent for small businesses. (Under that plan, bigger businesses would pay just 20 percent.)
Related: Small Retailers Grapple With Trump's Plan to Transform the U.S. Tax System
Of course, tax cuts have a price. Trump's revised tax plan, which he released in September and which includes cutting the corporate tax rate to 15 percent, is expected to reduce U.S. federal tax receipts by $2.35 trillion over 10 years. Should pass-through businesses see this same tax break, the cost would tick up another $900 billion to $1.5 trillion over the same period, according to the Tax Policy Center.
2. Your import costs could jump
To account for some of the loss, the president is considering a policy known as a border adjustment, which would add a 20 percent tax on all imported goods. The Better Way plan from the House, which holds the border-adjustment proposal as its reform centerpiece, would transition the U.S. to what it calls a destination-basis tax system. So instead of basing a company's federal tax liability on both the location of production and the location of the company, it would stem from the location of its sales.
"That's probably the most controversial part of the tax plan," says Robert Willens, an independent tax and accounting analyst in New York City. "It would convert the system from income based to hybrid sales tax."
Should it pass, the border adjustment is expected to raise $1.2 trillion over 10 years, according to the Tax Policy Center. The president has considered more tactical options, including a tariff on U.S. companies that manufacture outside the U.S. and a 20 percent tax on just Mexican imports. However, he could wind up favoring the border-adjustment proposal, as it is more comprehensive and thus more lucrative. That could help him fund his tax cuts.
3. You may have to pay federal taxes on overseas earnings
Another revenue raising effort favored by the president--which has more big business implications--is what's called "deemed repatriation" of currently deferred foreign profits. It is estimated that U.S. companies like Apple have as much as $2.5 trillion in cash sitting overseas. Under the proposal, these companies would be compelled to bring those proceeds back to the U.S. and pay taxes, at a rate of 10 percent over 10 years. Like a repatriation tax holiday, a deemed repatriation would generate one-time federal revenues.
An earlier version of Trump's tax plan held that a deemed repatriation would pair with eliminating U.S. companies' ability to defer paying taxes on income earned outside the U.S. That element was omitted from his revised tax plan, so it's unclear how he would handle non-U.S.-generated income going forward.
The House Better Way proposal suggests implementing a "territorial" system of taxes by way of a 100 percent exemption for dividends from foreign subsidiaries of U.S. companies. Translation: "It allows for the tax-free repatriation of earnings," says Willens.
4. You could lose almost all federal business tax credits
Trump is also calling for eliminating all but one federal business tax credit, for research and development. That includes putting limits on some companies' ability to deduct interest expenses, which could make financing capital asset purchases or servicing bank loans more costly, says Rosenberg. Currently, most companies can deduct interest expenses.
Under the latest version of the Trump tax plan, U.S. manufacturing companies can elect to expense investments in equipment, structures, and inventories--deducting them immediately--rather than depreciating these purchases over time, as current law requires. Businesses that elect immediate expensing would not be allowed to deduct interest expenses.
It's worth noting that there's disagreement within the tax community about whether this option would be given only to U.S. manufacturers. Trump has made statements suggesting that he may open up the option to all businesses.
The House Better Way plan, by contrast, doesn't provide an option. It simply allows expensing for all businesses without the ability to deduct interest paid. "They don't like that the tax code [currently] encourages leveraging," says Willens. "They would eliminate the preference for indebtedness."
Whatever the downsides may be, you won't hear Walsh complaining. "I'm excited about whatever Trump's tax plan is. He's a businessman," he says. "Hopefully the new laws will bring us some relief."
"When you hit that 90 percent tax level, there is just not that much incentive to doing business," says Walsh, whose company landed at No. 169 on the 2016 Inc. 5000 list of the fastest-growing private companies in America. "We're really not far from that."
So President Donald Trump's promise to slash the federal corporate tax rate is welcome news. "Tax is a big deal to us," says Walsh, whose 12-person company brought in $3.1 million in revenue in 2015. "We've been pulling back one region at a time since the business climate is so hostile."
Like Walsh, business owners across the U.S. are following Trump's tweets, speeches, and executive orders closely--eager for any indication that he'll make good on campaign promises to cut the federal corporate tax rate in half.
In a recent discussion with airline CEOs, Trump noted that there would be an announcement that would be "phenomenal in terms of tax" in the next two to three weeks.
While details are thin, if it's anything like what Trump put forward on the campaign trail, chances are good that as many businesses will be pleased as are dissatisfied--and you'll need to potentially make major course corrections to your business as a result.
"Doing large-scale tax reform is still a difficult thing, and it does involve winners and losers," says Joseph Rosenberg, a senior research associate at the Urban-Brookings Tax Policy Center, a nonpartisan tax-policy research organization in Washington, D.C.
Here's a look at four key ways your business's taxes could change, for better or worse.
1. Your tax bill could drop, or not
The president has, at various points on the campaign trail, called for lowering the federal corporate tax rate to 15 or 20 percent from the upper-level range of 35 percent. And while he has said the measure would apply to all businesses, both small and large, it's not yet clear if pass-through entities like LLCs and S Corps will be included. Most small businesses are structured as pass-through entities, which means a business's income is taxed on an owner's individual return.
The president may choose to favor a plan put forward last year by House Speaker Paul Ryan (R., Wisconsin) and Ways and Means Committee Chairman Kevin Brady (R., Texas). That proposal, named A Better Way, offers to create a separate low tax rate of 25 percent for small businesses. (Under that plan, bigger businesses would pay just 20 percent.)
Related: Small Retailers Grapple With Trump's Plan to Transform the U.S. Tax System
Of course, tax cuts have a price. Trump's revised tax plan, which he released in September and which includes cutting the corporate tax rate to 15 percent, is expected to reduce U.S. federal tax receipts by $2.35 trillion over 10 years. Should pass-through businesses see this same tax break, the cost would tick up another $900 billion to $1.5 trillion over the same period, according to the Tax Policy Center.
2. Your import costs could jump
To account for some of the loss, the president is considering a policy known as a border adjustment, which would add a 20 percent tax on all imported goods. The Better Way plan from the House, which holds the border-adjustment proposal as its reform centerpiece, would transition the U.S. to what it calls a destination-basis tax system. So instead of basing a company's federal tax liability on both the location of production and the location of the company, it would stem from the location of its sales.
"That's probably the most controversial part of the tax plan," says Robert Willens, an independent tax and accounting analyst in New York City. "It would convert the system from income based to hybrid sales tax."
Should it pass, the border adjustment is expected to raise $1.2 trillion over 10 years, according to the Tax Policy Center. The president has considered more tactical options, including a tariff on U.S. companies that manufacture outside the U.S. and a 20 percent tax on just Mexican imports. However, he could wind up favoring the border-adjustment proposal, as it is more comprehensive and thus more lucrative. That could help him fund his tax cuts.
3. You may have to pay federal taxes on overseas earnings
Another revenue raising effort favored by the president--which has more big business implications--is what's called "deemed repatriation" of currently deferred foreign profits. It is estimated that U.S. companies like Apple have as much as $2.5 trillion in cash sitting overseas. Under the proposal, these companies would be compelled to bring those proceeds back to the U.S. and pay taxes, at a rate of 10 percent over 10 years. Like a repatriation tax holiday, a deemed repatriation would generate one-time federal revenues.
An earlier version of Trump's tax plan held that a deemed repatriation would pair with eliminating U.S. companies' ability to defer paying taxes on income earned outside the U.S. That element was omitted from his revised tax plan, so it's unclear how he would handle non-U.S.-generated income going forward.
The House Better Way proposal suggests implementing a "territorial" system of taxes by way of a 100 percent exemption for dividends from foreign subsidiaries of U.S. companies. Translation: "It allows for the tax-free repatriation of earnings," says Willens.
4. You could lose almost all federal business tax credits
Trump is also calling for eliminating all but one federal business tax credit, for research and development. That includes putting limits on some companies' ability to deduct interest expenses, which could make financing capital asset purchases or servicing bank loans more costly, says Rosenberg. Currently, most companies can deduct interest expenses.
Under the latest version of the Trump tax plan, U.S. manufacturing companies can elect to expense investments in equipment, structures, and inventories--deducting them immediately--rather than depreciating these purchases over time, as current law requires. Businesses that elect immediate expensing would not be allowed to deduct interest expenses.
It's worth noting that there's disagreement within the tax community about whether this option would be given only to U.S. manufacturers. Trump has made statements suggesting that he may open up the option to all businesses.
The House Better Way plan, by contrast, doesn't provide an option. It simply allows expensing for all businesses without the ability to deduct interest paid. "They don't like that the tax code [currently] encourages leveraging," says Willens. "They would eliminate the preference for indebtedness."
Whatever the downsides may be, you won't hear Walsh complaining. "I'm excited about whatever Trump's tax plan is. He's a businessman," he says. "Hopefully the new laws will bring us some relief."
Feb 25, 2017
EPA head previously used private email for government business
A spokesman in the office of Pruitt's successor, Mike Hunter, told Oklahoma City's Fox 25 that Pruitt had used his personal email account when he worked there.
Pruitt was Oklahoma's top attorney from 2011 until the Senate confirmed him last week to be President Trump's EPA head.
Fox 25 discovered the email address in a public records request. The documents it received contained a redacted address, which Lincoln Ferguson, a spokesman for the office, said was a personal account that had been searched for the station's request.
The redacted address also appears in the thousands of pages of emails that Oklahoma released this week detailing Pruitt's and his aides' communications with energy companies and conservative groups, among others.
Pruitt had told the Senate Environment and Public Works Committee last month, as part of his confirmation process, that he had a personal email account, but he never used it for official business.
Using a personal email address for official business does not violate Oklahoma's laws regarding government records.
Hillary Clinton, the unsuccessful Democratic candidate for president in last year's election, famously used a private email address on a privately run server for official business when she was secretary of State, a setup that played a key role in the 2016 presidential election.
Federal employees are not legally prohibited from using personal email accounts for business, but they must quickly copy the emails to a government system for record-keeping and transparency purposes.
Lisa Jackson, EPA administrator from 2009 to 2013, used an email address within the government system with a pseudonym, "Richard Windsor."
Senate Environment and Public Works Committee Chairman John Barrasso (R-Wyo.), brought up Jackson's email address at Pruitt's confirmation hearing, and asked Pruitt if he would "refrain from taking any such action that makes it difficult or impossible for the public to access your official written communications under the Freedom of Information Act."
Pruitt said "yes," and added that he believes transparency is important.
Jan 16, 2017
6 Ways to Think Outside the Box When Marketing Your Small Business
Sometimes budget limits small businesses from executing their marketing ideas, but not every successful strategy requires a lot of money. Here are six outside the box ways to market your small business that are both inexpensive and effective.
1. Get personal.
Customers love the opportunity to make something their own. Studies have shown that 56 percent of consumers said receiving a personalized incentive would improve consideration of the brand. Think Personalized M&M'S and Share a Coke. If there's a way for you to allow customer customization, give it a try and see how your audience responds. Not sure how to add a personal touch to your business? Anything that gets your customer's name on your product works -- using frosting to write the order name on your donuts, or offering free monograming on your inventory of purses or apparel.
2. Promote customer engagement.
In today's social world, whatever you can do to make your small business more shareable is good for marketing. What is something you could implement that your customers would find Insta-worthy? Create an opportunity for photo opps and increase your social reach without spending a cent. A "selfie campaign" is a great way to encourage posting and sharing. You can even add a prize component to entice people to use your custom hashtag or tag your business in their posts.
3. Say thanks.
How often do you let your customers know that you appreciate them? You'd be surprised the power a simple "thank you" can have on creating customer loyalty. A study by TD Bank found that 77 percent of consumers like when brands demonstrate their appreciation. While a card can often be effort enough, let's try to remember that we're thinking outside the box and go for something bigger. How about hosting a special event where guests can sample new menu items, or showcase the season's new arrivals with a fashion show? Any event that builds excitement and celebrates the customers will do the job. Try utilizing Meetup.com or another event website that can gain the attention of new customers as well as current ones.
4. Develop a loyalty program.
If you're losing customers, you need to establish a way to cultivate repeat business. Eighty percent of U.S. Generation Z consumers are willing to sign up for loyalty cards in exchange for deals or discounts Your loyalty program can be as basic as a punch card or as elaborate as a membership that rewards customers based on how often they visit or even how much they spend.
5. Utilize LinkedIn.
LinkedIn is one of the most frequently skipped social media networks for small businesses. But why? While not the most exciting platform, it does provide unique opportunities for marketing your business. Without even spending any money, you can connect with people in your community by creating a group and reaching out to other small business owners and potential customers in your area.
6. Survey your current customers.
If you're not sure what types of marketing or promotions your customers will respond to best, ask them. A simple survey can provide endless insight into what you're doing right and wrong, and what you're not doing that you should be. Include a raffle-like component, where one participant will win a prize (such as a $100 credit to your business) to encourage your audience to take part.
1. Get personal.
Customers love the opportunity to make something their own. Studies have shown that 56 percent of consumers said receiving a personalized incentive would improve consideration of the brand. Think Personalized M&M'S and Share a Coke. If there's a way for you to allow customer customization, give it a try and see how your audience responds. Not sure how to add a personal touch to your business? Anything that gets your customer's name on your product works -- using frosting to write the order name on your donuts, or offering free monograming on your inventory of purses or apparel.
2. Promote customer engagement.
In today's social world, whatever you can do to make your small business more shareable is good for marketing. What is something you could implement that your customers would find Insta-worthy? Create an opportunity for photo opps and increase your social reach without spending a cent. A "selfie campaign" is a great way to encourage posting and sharing. You can even add a prize component to entice people to use your custom hashtag or tag your business in their posts.
3. Say thanks.
How often do you let your customers know that you appreciate them? You'd be surprised the power a simple "thank you" can have on creating customer loyalty. A study by TD Bank found that 77 percent of consumers like when brands demonstrate their appreciation. While a card can often be effort enough, let's try to remember that we're thinking outside the box and go for something bigger. How about hosting a special event where guests can sample new menu items, or showcase the season's new arrivals with a fashion show? Any event that builds excitement and celebrates the customers will do the job. Try utilizing Meetup.com or another event website that can gain the attention of new customers as well as current ones.
4. Develop a loyalty program.
If you're losing customers, you need to establish a way to cultivate repeat business. Eighty percent of U.S. Generation Z consumers are willing to sign up for loyalty cards in exchange for deals or discounts Your loyalty program can be as basic as a punch card or as elaborate as a membership that rewards customers based on how often they visit or even how much they spend.
5. Utilize LinkedIn.
LinkedIn is one of the most frequently skipped social media networks for small businesses. But why? While not the most exciting platform, it does provide unique opportunities for marketing your business. Without even spending any money, you can connect with people in your community by creating a group and reaching out to other small business owners and potential customers in your area.
6. Survey your current customers.
If you're not sure what types of marketing or promotions your customers will respond to best, ask them. A simple survey can provide endless insight into what you're doing right and wrong, and what you're not doing that you should be. Include a raffle-like component, where one participant will win a prize (such as a $100 credit to your business) to encourage your audience to take part.
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