You’re the Boss Blog: Every Business Has a Special Number, or Metric. Do You Know Yours?

You’re the Boss Blog: Every Business Has a Special Number, or Metric. Do You Know Yours?

Strategies: If You’re a Bond Investor, Beware of the Seesaw

THE Securities and Exchange Commission issues frequent bulletins about what it calls “investment frauds and scams” — a frightening taxonomy of plots and stratagems aimed at separating investors from their money.

The agency’s alerts range from warnings of Madoff-style Ponzi schemes to “pump and dump” operations intended to temporarily inflate a stock price. They also include cautionary notes about polite offers of assistance from predators posing as government regulators.

Lately, though, the S.E.C. has been giving a warning of a different sort. Bearing the general title “Interest Rate Risk,” this latest bulletin is a cry for understanding. It’s about bonds, and for most people, the subject is confounding.

The problem isn’t a new scam but a lack of knowledge about how bonds work, which can be dangerous in a time of rising interest rates. In its bulletin, the agency points out that investors need to understand that when rates rise, bond prices generally fall. This inverse relationship is a fact of life in the bond market. Like gravity in the physical world, it’s constant, powerful and important.

But outside trading floors, business schools, banks and brokerage firms, bond dynamics are fairly obscure, surveys find. That’s troubling in a time like this, said Lori Schock, director of the agency’s Office of Investor Education and Advocacy. “We’re not predicting what’s going to happen to interest rates or when,” she said, “but we do know that rates can’t go much lower. And we know that they can go a lot higher.”

If interest rates do go higher, most people don’t understand how that will affect bonds. A 2012 financial literacy survey by the Finra Investor Education Foundation asked this question: “If interest rates rise, what will typically happen to bond prices?” Prices will fall, but only 28 percent of adult Americans in the survey answered correctly. Finra ran the same survey in 2009 and got the same results.

The Finra survey found that financial literacy levels were generally very low. On its Web site, it offers a five-question quiz, with questions drawn from the survey — none requiring computations, just an understanding of basic concepts. Only 14 percent get them all right, it says. (The average number of correct answers is between 2 and 3.)

As far as bonds go, Ms. Schock said, one way to visualize the relationship of interest rates and prices is to think of what she calls “a teeter-totter.” She’s from Indiana. In Queens, where I come from, we call it a seesaw. Whatever you call it in your playground, imagine interest rates sitting on one side of a plank and bond prices clinging to the other. When one side rises, the other falls.

That’s just the way seesaws work, and it may be enough explanation. But suppose you want to go a little deeper: Why do interest rates and bond prices move like this?

Here’s one way to understand it: When you buy a fixed-rate bond, you are making a loan. In return, you get your money back, plus interest. When market interest rates rise, the bond drops in value. That’s because, under current conditions, anyone making the same loan will expect more interest than you’ve gotten. If you want to trade the old bond for a new one, the old one will have less value. And when something sold in the marketplace has less value, its price usually falls.

There are exceptions to every rule, of course. If the bond’s interest rate isn’t fixed, and instead readjusts as market rates change, the seesaw analogy doesn’t hold. And the prices of different kinds of bonds shift differently. But the seesaw captures the basic idea.

It’s important right now because interest rates have risen since the spring, and, therefore, prices have fallen. If you don’t understand the relationship between prices and rates (often called yields) you could hurt yourself “by reaching for yield, buying bonds that you think are going to pay you more interest, only to see rates go up further, so the value of your bonds will fall,” Ms. Schock said.

Many people are in danger of getting hurt this way. “We’re concerned that many people might mistakenly think that there’s safety in investing in bonds,” she said, “when there’s actually a fairly good chance of running into trouble with interest rate risk now.”

EVEN Treasury bonds are affected by interest rate risk, although the federal government backs these bonds and will pay all the principal and interest if you hold them to maturity. Such high-quality bonds are safe in many ways, especially in comparison with other assets.

Bond prices are generally less volatile than stock prices, and a major bond market decline is likely to be much less severe than a major fall in the stock market. Bonds can provide steady income and — whether held individually or in a mutual fund — can play an important role in a diversified portfolio, buffering against stock fluctuations.

But when market rates rise, you’ll run into a pricing problem if you need to sell a bond — or if you hold Treasuries in a mutual fund, where they are priced daily. All things equal, your mutual fund will fall in value as yields rise.

Interest rates on Treasuries — and a range of other bonds — have already risen sharply, and a broad consensus of market analysts says they are likely to rise further in the years ahead. Historically, rates are still relatively low, largely in response to the policies of the Federal Reserve. The Fed has been buying $85 billion of bonds a month, but is considering an end to those purchases.

Bond yields gyrated last week in response to congressional testimony by Ben S. Bernanke, the Fed chairman, who said Fed action was “by no means on a preset course.” If the economy strengthens, he said, the Fed will ease its bond-buying. That could result in higher interest rates.

If you hold your bonds until maturity — or keep them as a buffer — you may tolerate such swings. But it’s better if you understand what’s going on. Remember the seesaw: When yields rise, prices fall.

Strategies: If You’re a Bond Investor, Beware of the Seesaw

THE Securities and Exchange Commission issues frequent bulletins about what it calls “investment frauds and scams” — a frightening taxonomy of plots and stratagems aimed at separating investors from their money.

The agency’s alerts range from warnings of Madoff-style Ponzi schemes to “pump and dump” operations intended to temporarily inflate a stock price. They also include cautionary notes about polite offers of assistance from predators posing as government regulators.

Lately, though, the S.E.C. has been giving a warning of a different sort. Bearing the general title “Interest Rate Risk,” this latest bulletin is a cry for understanding. It’s about bonds, and for most people, the subject is confounding.

The problem isn’t a new scam but a lack of knowledge about how bonds work, which can be dangerous in a time of rising interest rates. In its bulletin, the agency points out that investors need to understand that when rates rise, bond prices generally fall. This inverse relationship is a fact of life in the bond market. Like gravity in the physical world, it’s constant, powerful and important.

But outside trading floors, business schools, banks and brokerage firms, bond dynamics are fairly obscure, surveys find. That’s troubling in a time like this, said Lori Schock, director of the agency’s Office of Investor Education and Advocacy. “We’re not predicting what’s going to happen to interest rates or when,” she said, “but we do know that rates can’t go much lower. And we know that they can go a lot higher.”

If interest rates do go higher, most people don’t understand how that will affect bonds. A 2012 financial literacy survey by the Finra Investor Education Foundation asked this question: “If interest rates rise, what will typically happen to bond prices?” Prices will fall, but only 28 percent of adult Americans in the survey answered correctly. Finra ran the same survey in 2009 and got the same results.

The Finra survey found that financial literacy levels were generally very low. On its Web site, it offers a five-question quiz, with questions drawn from the survey — none requiring computations, just an understanding of basic concepts. Only 14 percent get them all right, it says. (The average number of correct answers is between 2 and 3.)

As far as bonds go, Ms. Schock said, one way to visualize the relationship of interest rates and prices is to think of what she calls “a teeter-totter.” She’s from Indiana. In Queens, where I come from, we call it a seesaw. Whatever you call it in your playground, imagine interest rates sitting on one side of a plank and bond prices clinging to the other. When one side rises, the other falls.

That’s just the way seesaws work, and it may be enough explanation. But suppose you want to go a little deeper: Why do interest rates and bond prices move like this?

Here’s one way to understand it: When you buy a fixed-rate bond, you are making a loan. In return, you get your money back, plus interest. When market interest rates rise, the bond drops in value. That’s because, under current conditions, anyone making the same loan will expect more interest than you’ve gotten. If you want to trade the old bond for a new one, the old one will have less value. And when something sold in the marketplace has less value, its price usually falls.

There are exceptions to every rule, of course. If the bond’s interest rate isn’t fixed, and instead readjusts as market rates change, the seesaw analogy doesn’t hold. And the prices of different kinds of bonds shift differently. But the seesaw captures the basic idea.

It’s important right now because interest rates have risen since the spring, and, therefore, prices have fallen. If you don’t understand the relationship between prices and rates (often called yields) you could hurt yourself “by reaching for yield, buying bonds that you think are going to pay you more interest, only to see rates go up further, so the value of your bonds will fall,” Ms. Schock said.

Many people are in danger of getting hurt this way. “We’re concerned that many people might mistakenly think that there’s safety in investing in bonds,” she said, “when there’s actually a fairly good chance of running into trouble with interest rate risk now.”

EVEN Treasury bonds are affected by interest rate risk, although the federal government backs these bonds and will pay all the principal and interest if you hold them to maturity. Such high-quality bonds are safe in many ways, especially in comparison with other assets.

Bond prices are generally less volatile than stock prices, and a major bond market decline is likely to be much less severe than a major fall in the stock market. Bonds can provide steady income and — whether held individually or in a mutual fund — can play an important role in a diversified portfolio, buffering against stock fluctuations.

But when market rates rise, you’ll run into a pricing problem if you need to sell a bond — or if you hold Treasuries in a mutual fund, where they are priced daily. All things equal, your mutual fund will fall in value as yields rise.

Interest rates on Treasuries — and a range of other bonds — have already risen sharply, and a broad consensus of market analysts says they are likely to rise further in the years ahead. Historically, rates are still relatively low, largely in response to the policies of the Federal Reserve. The Fed has been buying $85 billion of bonds a month, but is considering an end to those purchases.

Bond yields gyrated last week in response to congressional testimony by Ben S. Bernanke, the Fed chairman, who said Fed action was “by no means on a preset course.” If the economy strengthens, he said, the Fed will ease its bond-buying. That could result in higher interest rates.

If you hold your bonds until maturity — or keep them as a buffer — you may tolerate such swings. But it’s better if you understand what’s going on. Remember the seesaw: When yields rise, prices fall.

You're the Boss Blog: Deciding When to Fight for a Small Business

A broker assesses the small-business lending market.

I remember learning in business school that business is supposed to be rational and efficient. Markets sort themselves out, supply and demand curves eventually intersect, and spreadsheets and algorithms lead to smart decision making.

In my life as a loan broker, however, it often seems as if the opposite is true. Every day, as I work with small-business owners, I make decisions that are at least partially emotional. And this is particularly tough, because I know that sometimes small-business owners may take my guidance as the last word on whether they can expect to obtain capital, which may affect their dreams and livelihoods, as well as other people’s jobs.

So somewhere I have to find a balance between rational decision making and my own moral compass.

Sometimes the phone rings with an entrepreneur whose business is on life support and who is looking for a last breath of life. Generally, the business already has too much debt. In many cases, it has already layered one merchant cash advance over another. And now it is hoping to find more of the same drug. The temptation is strong — even for me. Who wants to be the bad guy who says no? And as loan products get riskier and more expensive, so do the commissions. I, too, have lights to keep on.

But I wouldn’t be doing my job if I hunted down loans for every owner who calls. If there isn’t a coherent plan for a business to work its way out of an expensive financing, something is wrong. I don’t want to be the one who writes the last loan that sends a business over the edge. The better option might be to sell some assets. Perhaps the owners should reduce their cost of living or cut business expenses. If that’s the real problem, taking another expensive loan isn’t going to solve it. So I try to explain to the client why I am not willing to help. It’s not a message that I enjoy delivering, and it’s rarely well received.

A few months ago, I went to visit a prospective client near my office. As I pulled up to her office, she was sitting in her Range Rover in the parking lot with her child. When we walked into the warehouse, the power was out. She told me that there was an outage, but I suspected the power might have been shut off because the bill hadn’t been paid. Then her husband pulled up in his Jaguar to take the child. When we sat down to review her financials, I saw there was hardly anything in the bank. Ultimately, I passed on trying to help her. She didn’t need another loan, although I might have been able to find one. She and her husband needed to sell the cars and focus on fixing the business.

In other cases, I choose to go into triple battle mode for a business that I think is being penalized by some silly underwriting nuance that makes no sense. In these cases, the business has a plan and a vision, and I can see how money will help it grow. And even if the money is expensive, it’s clear that the business can afford it.

This week I am battling for a company that has more work than it can handle upgrading cellphone towers from 3G to 4G. The underwriters classify the company as a contractor and blindly refuse to lend to it. But to me, the entrepreneur on the other end of the phone line sounds genuine and honest. He is fighting the fight. He deserves an advocate. Sometimes these efforts suck up dozens of hours and bring no results. But when they work, they’re worth it — emotionally and financially.

Perhaps the most important thing I learned in business school came from the economics professor who answered most questions with a smile and the response, “It depends.” He was right.

Ami Kassar founded MultiFunding, which is based near Philadelphia and helps small businesses find the right sources of financing for their companies.

You're the Boss Blog: This Week in Small Business: Not Again!

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Small-Business Must-Reads

An unregulated, decentralized virtual currency just became a billion-dollar market (but Felix Salmon explains why Bitcoin’s rise is nothing to celebrate). A videographer, Dustin Cohen, tells a Brooklyn shoemaker’s story, and an important part of the health care legislation affecting small businesses is delayed.

The Economy: ‘We’ve Been to This Rodeo’

The March jobs report is a “punch to the gut” (but don’t blame sequestration). Companies added fewer workers than projected last month, held back by limited hiring in construction. Ylan Q. Mui wonders whether this is an April Fool’s economy: “We’ve been to this rodeo twice already. In 2012 and 2011, seemingly strong momentum in the first half of the year gave way to summer slumps. Will the third try be the charm? Or is this just another prank — one that’s getting old fast.” Construction spending (pdf), as well as personal income and consumption all increased in February but economic confidence slipped in March. Demand for office space improves. Car sales surge as General Motors introduces a pair of midsize pickup trucks for casual users and small businesses. Economic activity in the nonmanufacturing sector also grows. Steven Hansen says that despite the headlines, manufacturing is not good. And here are 16 big bubbles that are getting ready to burst.

Employment: Hiring Veterans

The National Federation of Independent Business reports that small-business employment climbed last month by the most in a year, but hiring fell according to a monthly survey by SurePayroll. Another study, from Intuit, found that small businesses hired more in February but revenues continued to drop. Derek Bennett says hiring veterans is good business. Workers in seven of the 10 largest occupations typically earn less than $30,000 a year, and for many small-business owners, two jobs are a must. A survey finds small companies favor immigration changes that would provide a path to citizenship.

Management: Disco and Leadership

Bill J. Bonnstetter writes that empathy is one of the qualities most entrepreneurs lack. Terry Starbucker explains what the rise, fall, and comeback of disco teaches us about leadership. Nick Tasler says there are reasons we ignore good advice. Nate Bolt provides a photo summary of how people sit in meetings and what they really mean. A new smart drug is especially popular among entrepreneurs.

Energy: A Zero-Energy Retail Store

The first refinery in the United States since 1976 is being built in North Dakota as the Obama administration moves ahead with sweeping rules requiring cleaner gasoline. Some blame the corn industry for high gasoline prices — but after a sharp two-month climb of nearly 60 cents a gallon, gas prices have fallen over the past month and may have peaked for the year. Even so, farmers are planning on planting the most corn since 1936. A retailer’s new store will supply its own energy.

Ideas: Smell-O-Vision

These are the 10 fastest-growing industries for small businesses. Teaching a course using your expertise is just one of five potential sources of side revenue you could be earning, according to John Corcoran. Samuel Wagreich thinks there are plenty of profits in 3-D printing. Sperm has become one of America’s hottest exports. A Smell-o-Vision display emits localized virtual odors.

Customer Service: Apple Learns a Lesson

This infographic sums up the true cost of poor customer service. Jason Harter explains how Twitter has revolutionized the way we interact with customers. This is how the Zac Brown Band cultivates fans. Small businesses are finding success with customer-relationship software. Lauren Simonds says giveaways can turn tough sales into easy ones. Apple learns a customer-service lesson in China.

Start-Up: A Giant Mood Swing

Peter Cohan lists five steps for raising start-up capital. Kevin D. Johnson believes “the potential for attaining greatness is in creating new markets.” These are the 11 start-ups that beat 1,700 others for spots in New York’s hottest accelerator program. Being the founder of a start-up is just “one big giant mood swing.” CNBC has a new series that will feature small businesses in a reality competition.

Cash Flow: Calculating Gross Profit

An alternative lender plans to provide loans to 100,000 small businesses this year. Here is a useful guide on how to calculate gross profit. Macy’s mistakenly marks down a $1,500 necklace to $47. Amanda Henson shares some options for finding the right small-business grant. Here’s how to go global with your small business, and a Small Business Administration official has advice for how to get payment for your export sales.

Your People: Working From Home

Barbara Corcoran explains what motivates employees more than money, and JJ Ramberg suggests three ways to energize your staff. Ian Smith offers ideas for creating a more positive environment for employees, and here are 26 delightful ways to make the work day more fun. Stephen J. Dunn analyzes the differences between employees and independent contractors. Liane Cassavoy offers tips for keeping your work-from-home employees accountable (without spying), and Mike Russell has thoughts on telecommuting from a manager’s perspective. A new study encourages men to do less housework.

Online: The Death of QR Codes

These are the top boards for monetizing Pinterest. Marla Tabaka has advice for attracting a huge crowd with LinkedIn. A co-founder of YouTube announces a new video-creation Web site. Christopher Mims explains how the Internet is making us poor. On April Fool’s Day, Google introduces a “search and smell” feature and trades insults with Microsoft. David Meerman Scott says you should never delete content. Dana Prince says your opt-out rate is one of five online metrics to watch. Christopher Penn says there are times when it’s O.K. to use boring e-mail subject lines. Aaron Strout believes QR codes are dying.

Taxes: The Bagel Tax

K’Lee Banks lists five ways to book the right bookkeeper. Here’s how to claim a home-office deduction for your small business. Paul Caron summarizes a few last-minute tax tips (but be sure to avoid these crazy deductions). These 10 corporate “taxation heroes” paid as much in taxes as the bottom 75 percent of all American taxpayers. The chairman of the House Ways and Means Committee is outlining proposals to reduce the burden the tax code imposes on small businesses. And did you know that New York State charges an extra 8 percent tax if you ask for your bagel to be sliced? Was Shakespeare a tax-evading food hoarder?

Red Tape: Teenage Tanning

The chairman of the House small business panel wants to know how the Small Business Administration will deal with the sequestration’s impact. The president hints at a budget compromise, continues to push his plan to build infrastructure and plays an April Fool’s joke. The fight over an Internet sales tax intensifies. New Jersey’s governor signs a teenage tanning law despite small-business concerns. New software will allow New York taxi regulators to monitor taxi whereabouts in real time. Saki Knafo believes that New York’s paid sick leave bill may serve as a model for the United States, but New York’s mayor vows to veto it.

Around the Country: Mentor Month

An OfficeMax in Milwaukee refashions itself so that it can offer more to small-business customers. An online Ponzi scheme leaves a North Carolina town poorer. The Small Business Administration and AARP will hold a series of events for “Mentor Month.” A contest sponsored by the UPS Store will shine a spotlight on small-business owners. Local experts explain the difficulties of making money in Chicago’s comedy business. A longtime owner sells his Minnesota grocery store to his employees. A California city is allowed to go bankrupt. A survey ranks the most (and least) small-business-friendly states and cities while another study concludes that there is more economic freedom in red states. A bunch of people walk backward through Times Square.

Around the World: Jeddah’s Entrepreneurs

Cliff Wachtel shares seven lessons he learned from Cyprus, where many small businesses were caught in the cross-fire. A Small Business Saturday is scheduled for Britain, and a Startup Weekend highlighted Jeddah’s entrepreneurial spirit. Queen Elizabeth gets a raise. One Chinese entrepreneur believes mainland start-ups must “become huge or die.” China’s manufacturing growth improved in March but the euro zone’s manufacturing slump deepened. The Netherlands falls prey to the economic crisis and the mortgage crisis in Ireland is “insane.” In a survey, America is found to be the most difficult retail market while Africa is the most promising. With its new start-up visa program, Canada is hoping to lure foreign entrepreneurs. A Samoan airline decides to base its fares on a passenger’s weight. A global giving initiative is hoping to empower small businesses to change their communities and better their lives. Nauru is the world’s least visited country.

Technology: A Data-Centric Universe

New software puts Facebook front and center on Android phones. Kyle Wagner believes battery life is “the only spec that matters.” Mike Foreman says small-business awareness of the cloud’s benefits is growing. This is how to triple your business with a little guidance and good software. Brace yourself for a data-centric universe with sensors everywhere, says a chief technology officer. Karen E. Klein has examples of how small businesses use big data. The first mobile phone call was placed 40 years ago.

Tweet of the Week

@DearAnyone – A good way to get out of a conversation is to take off one of your socks and hand it to the person talking.

This Week’s Best Quote

Karen Vitale’s advice to her 20-year-old self includes, “Chill out”: “You will get dream jobs, lose dream jobs, realize there are no true dream jobs, and life will march on. Instead of trying too hard to get employers to want you, channel some of that nervous energy into figuring out if this is the best job for you. And if things do go south, remember that how you respond will say more about your character than any pat answer to an interview question. Do your best damage control and show the interviewer how you manage a crisis in real time.”

This Week’s Question: Do you support paid sick leave?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

You're the Boss Blog: Torn Between Two Start-Up Communities

A social entrepreneur tries to change the way people shop.

Most start-ups fail. It’s a fact. It’s also a fact that I don’t consider failure an option. I started Fashioning Change in San Diego where I went through the Founder Institute, a tech accelerator that connected me to some of the top technology minds in San Diego and around the country. I entered the program as the only social enterprise, as one of the youngest participants and as the only woman of the 23 entrepreneurs accepted.

The program was like drinking from a fire hose. It was tough — the intensity actually brought a couple of the guys to tears and only 11 of the 23 entrants went on to graduate. But the experience was invaluable and connected me to a network of brilliant advisers and mentors that taught me what I needed to know to get Fashioning Change off the ground. Most important, I was able to form relationships with mentors, advisers, and investors through the institute, and I anticipated that once I graduated from the San Diego chapter of the Founder Institute I would continue to build the same types of relationships throughout the San Diego community.

It didn’t take me long to realize, however, that the Founder Institute was ahead of the curve when it came to women in tech and that I was going to have to look beyond San Diego to find the capital and support I needed to build Fashioning Change. Based on my experience, I suspect San Diego suffers from what Brad Feld refers to as the “patriarch problem” in his book “Startup Communities.”

“The first of the classical problems that stall progress in a start-up community is the patriarch problem. In moments of frustration, I call this the old-white-guy problem. At its core, it’s one of the key challenges of a hierarchical organizational model, one in which the most powerful people are the ones at the top of the hierarchy. In many cities, especially in the United States, these patriarchs are the old white guys who made their money many years ago but still run the show.”

As a San Diego native, I found it painful to see the patriarch problem persist at the expense of the start-up community. And because I wasn’t finding the resources we needed to help Fashioning Change grow, I began to seek them in other places — primarily in Santa Monica and the Bay Area. Last spring, I began driving up to Santa Monica two or three times a month. I instantly experienced a positive extension of the small adviser and mentor network I had met through Founder Institute in San Diego. In Santa Monica, I sensed far more excitement about helping one another and seeing the start-up ecosystem grow. Last summer, my drives to Santa Monica increased to two or three times per week.

The start-up ecosystem is exploding around Santa Monica, which is becoming known as Silicon Beach. To my surprise, I soon met several San Diego start-ups that had moved north only after they had reluctantly given up on San Diego. In Santa Monica, even as outsiders, they found mentors and resources to be far more accessible. Every trip north pushed Fashioning Change forward. I would drive up and then drive back filled with energy and information. As we executed on everything, we continued to build traction.

As time passed, I couldn’t shake the feeling that we needed a more permanent presence in Santa Monica. It’s a feeling I fought and struggled with for personal reasons. I didn’t want to turn my back on my city. Also, I’m extremely close to my family. In fact, the process of building my start-up helped me become closer to them because I gave up my cute two-bedroom apartment, sold all of my furniture, and moved back home so that I could cut down on expenses and extend the company’s runway. Living at home allowed me to spend additional time with my older brother who has a disability. On days when the start-up life seemed especially frustrating, coming home always put things into perspective.

Eventually, we decided to rent a Fashioning Change house in Santa Monica that serves as our local headquarters — although we still have an office in San Diego where our developers work. Lately, I’ve been spending a lot of time in San Diego because my co-founder, Kevin Ball, just had a beautiful baby boy. The San Diego office is in a free tech incubator downtown. Last week I was told by the leaders of the incubator that Fashioning Change has to raise more capital.

The people making this demand know nothing about our day-to-day operations. In fact, when we send them update reports, the e-mails aren’t even opened (on MailChimp, you can see who opens the e-mails and how many times). The incubator’s interest in our raising money has little to do with our needs and everything to do with it wanting to report positive news to its own donors. But at this point we have no need to raise more capital, so we’re not going to do it — even if it means we have to move out of the incubator.

We recently heard of a hub of start-ups leasing space in another San Diego downtown building that might be a better location for our San Diego operations. We checked it out, and the leasing company seemed very start-up friendly. One plus is that we would get to be around other start-ups we respect. We will probably make a decision very soon.

Any suggestions? What is your start-up community like? Does it offer the kinds of resources you need?

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at adrianah@fashioningchange.com, and you can follow her on Twitter at @Adriana_Herrera.

You're the Boss Blog: Processing Credit Cards and Anger

The struggles of a business trying to survive.

I’d like to thank everyone who took time to comment on my posts on searching for credit card processing. Many of those comments shed additional light on aspects of the experience that I, for the sake of brevity and clarity, left out. As I hope I made clear, the world of card processing is extremely complex. Here are a few further thoughts, in no particular order:

Obviously, there is no one best solution for everyone. You will need to identify the size of your typical transaction and project a monthly charge volume in order to start the shopping process. My situation is unusual in that my transaction size is large and I never swipe cards. If I were running a restaurant or a store, I would have different needs. But I am sure that every merchant would benefit from a deal that has no fixed term and that you can get out of at minimum cost. Many providers are willing to waive term requirements and cancellation fees.

It also seems that leasing a terminal is a bad idea — it is much less expensive to buy one. Another warning that everyone should heed is to enter a personal identification number with debit card transactions. If you don’t, you will be charged very high interchange fees, instead of the low costs mandated by the Durbin Amendment.

My posts concentrated on the structure of the deal and short-changed discussion of pricing alternatives. Commenters were divided into two camps: those who favored interchange-plus pricing and those who liked a fixed fee, as offered by services like Square and Stripe. Nobody had anything good to say about tiered pricing (that link goes to an article that is informative but has a definite point of view). And there are still other pricing options out there. If you are looking for a short, authoritative look at all of the pricing alternatives, I wish you luck. The most comprehensive page I found was at Wikipedia. It offers concise definitions for the terms you might run across in your search but little guidance as to what might be the best choice. All of the other information I ran across was provided by someone who was trying to sell a particular type of transaction and should be understood in that context.

That said, I was intrigued with the service offered by CardFellow. This site allows you to submit information about your business and get offers from various processors. I tried it out and was quickly contacted by a company that promised me interchange plus .1 percent, a very attractive rate, along with a no-term contract and waiver of all cancellation fees. That seems to be about as low a price as anyone will offer. The accompanying agreement that I reviewed had all of the usual unfair provisions — the acquiring bank can levy a reserve account and change the deal any time it wishes. I have not seen an agreement that omitted all of this, but perhaps someone, somewhere, is offering one (let us know!). What I liked about CardFellow was the opportunity to get a variety of quotes and the site’s well written blog (not unbiased, but informative).

If you are looking for a single place to see reviews of various merchant service providers, take a look at Merchant Maverick. I came across this site while searching for information on CardFellow, and I read a few reviews. I liked the format. I have no idea whether it is doing a good job, but at least it offers a point of view. It didn’t offer reviews of PNC or Emerald World, but it did review Wells Fargo and WorldPay, both of which I have dealt with — and those reviews seemed to comport with my limited experiences. Merchant Maverick also has reviews of point-of-sale systems and shopping-cart providers — something for everybody!

Nobody had much to say about American Express. It seems as if we are all stuck with the company’s high fees and slow payment. Last year, about a third of my card transactions were American Express transactions, and I paid a little less than 4 percent in fees. I should probably stop accepting American Express — it is of no benefit to me, as a merchant. I would bet that most of the people who offer us an American Express card also have a regular credit card and that refusing it wouldn’t cost me sales.

One point that did not come up in comments but that I thought about a lot during this ordeal was whether worrying about credit card fees was a good use of my time. Here’s the sad math: even if I cut my card processing costs in half, my savings would be 2 percent of $400,000. The $8,000 savings is not insignificant, but there are many issues I could have spent time on that might have yielded similar or greater savings.

The more I learned about the credit card industry, the angrier I got, but rage is not a great reason to burn a lot of hours on a project. My free time is precious. I always have a list of things I can do to improve profitability. For example, I could have been working on my pricing spreadsheets to make our quotes more accurate. Or I could have dug deeply into our labor costs, or spent time on the shop floor making sure our procedures are as efficient as possible.

Credit card costs are on that list, but a rational analysis probably wouldn’t place them at the top. There is much more money to be saved elsewhere. Of course, the service providers know this, and the market is clearly structured on the assumption that this is true for the vast majority of small businesses — it takes a huge amount of time to figure out what is going on, and at a certain point, most merchants will give up and accept the deal that is being offered, just to get it over with. That’s what I did – after all of the time I spent with Wells Fargo and Citizens, I decided to just pull the trigger on Emerald World. It was a much better deal than I had at the time with PNC, so I went ahead with it. Now that commenters have exposed more options for my consideration, I may or may not revisit the issue. I’ll work with Emerald World for a while and see what happens.

I hope that the hours I spent on this project are of use to you. If anyone has anything further to add, please comment.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

You're the Boss: A Start-Up Tries to Give Wine Spritzers a New Image and a Second Wind

Sandy Huffaker for The New York Times Jayla Siciliano: “Keeping the product natural makes it much more difficult to find bottlers we can use.”The adventure of new ventures.

During the seven years she did product development and design for both Diesel in Santa Barbara, Calif., and Burton Snowboards in Burlington, Vt., Jayla Siciliano attended a lot of work-related parties and dinners and did plenty of social drinking. The problem was that she also had to get up the next morning and work, so during social events she started pouring sparkling water into her wine. “It was perfect,” she said. “I could sip that all night and I would wake up feeling fine.”

What she had concocted was a wine spritzer, the stuff women drank at summer barbecues in the 1970s and ’80s. The spritzer always had a “girlie” reputation, solidified with the advent of wine coolers in the ’80s, a bottled, sweetened version of the spritzer. The popularity of both spritzers and coolers faded in the ’90s, but in the last year or so the spritzer has been making a comeback. (This newspaper wrote about that comeback last May). Now Ms. Siciliano has become part of its second wind.

She first created her version of the spritzer while at Burton Snowboards, where she spent a lot of time on boats in the summer, conducting business with “big guys that do a lot of snowboarding.” They saw Ms. Siciliano pouring Pellegrino into her wine glass and started asking for some in theirs, too. “I thought if these guys want to drink a spritzer, I could break through the feminine reputation it has,” she said.

She quit her job in 2007, moved back to Santa Barbara and started doing research into things like carbonation, bottling and flavor formulas. She also went back to school and got an M.B.A. at the University of San Diego. While there, she wrote the business plan for her wine spritzer start-up, Bon Affair, and started raising money. Although Ms. Siciliano did conduct focus groups and surveys to collect data on the importance of ingredients, she did no market research before diving in.

Ms. Siciliano did look at trends in the alcohol industry, however, and saw both the growth in light beer over the last 20 years and the growing interest in wine as indicators she was onto something. “I also bartended in college and again in 2009, when I was starting Bon Affair,” she said, “and I saw lots of women looking for a lighter option after that second glass.”

In April 2010, Ms. Siciliano connected with Troy Johnson, a food writer in San Diego and former creator and star of the Food Network show “Crave.” Mr. Johnson said when he heard Ms. Siciliano describe her version of the spritzer — using good wine, no preservatives, no sweeteners — “lights started to go on. I had seen wine spritzers coming back a bit; the best mixologists were starting to play with them on their menus. And when I tasted it, it was so much better than I thought it was going to be. It has a very sophisticated palate.”

Mr. Johnson was traveling for “Crave” last February when Ms. Siciliano called to tell him she had found two angels willing to invest $450,000 in Bon Affair. She asked if he was on board. “I was sitting in a bar in Manhattan and I looked down at the menu and it said ‘wine spritzer,’” Mr. Johnson said. “I told her, ‘I’m in.’”

Founder: Jayla Siciliano.

Employees: Bon Affair has nine partners — all have stock options — but no full-time employees yet.

Location: Solana Beach, Calif.

Pitch: “The reason I got into this was because it fit into a healthy, balanced lifestyle, which is how I want to live,” Ms. Siciliano said. “We have two products, a sauvignon blanc and pinot noir and we don’t add sugar or preservatives. It’s a lighter alternative for wine drinkers, it has half the calories.”

Challenges: The first 5,000 bottles that came off the line last spring at the Detroit manufacturer Ms. Siciliano chose had specks of tomato floating in them. “They had been bottling a Bloody Mary mix and didn’t fully clean the line,” she said. “We had to scrap all of that.”

There were other bottling issues too — leaking, caps that wouldn’t come off, incorrect labels and low-fills. Ms. Siciliano discovered the cap problem right before a big event in San Diego, after which she and Mr. Johnson spent two days sorting through boxes to separate the bad from the good. The company has since switched to a California bottler. “Keeping the product natural makes it much more difficult to find bottlers we can use,” she said.

Traction: In January, after Bon Affair was mentioned in a Shape Magazine “Hot List,” Ms. Siciliano said Web orders went up tenfold: “We went from a few a week to five or six a day.” In fact orders went up so fast there wasn’t enough product to meet the demand. This spring, Bon Affair will be in four Whole Foods stores in San Diego as well as on Amazon. And in April, after the next bottling run, it will be sold in eight states. The company has also had some international sales through Wineflite, a wine-shipping service based in San Francisco.

Revenue: $15,000. The bottles retail for $14.

Financing: Three investors have put in $640,000.

Competition: “We really don’t have any direct competitors,” said Ms. Siciliano. “There are a couple of spritzer companies in Italy, but they are sweeter and have over 7 percent alcohol. We’re at 6.5 percent.”

What’s Next: A year from now Ms. Siciliano wants Bon Affair’s bottles lining the shelves of all the Whole Foods stores in California and offered on Virgin America flights.

What do you think? Is there a market for Bon Affair?

You can follow Eilene Zimmerman on Twitter.

You're the Boss Blog: Releasing New Web Sites and Trying to Manage S.E.O.

Portraits of women entrepreneurs.

In the last few months She Owns It business group members Beth Shaw, who owns YogaFit, and Alexandra Mayzler, who owns Thinking Caps Group, have overseen the redesign of their company Web sites.

When we last discussed Ms. Shaw’s proposed new site in depth, many readers were skeptical that her Web developer would meet her Jan. 1 deadline to go live. The developer came close — the new site was up Jan. 3 — and Ms. Shaw said she was “about 90 percent satisfied.” There was a problem with the search function, but it was quickly addressed, she said.

The redesign did not include new Web site copy. Most of the old text was merely “poured over,” Ms. Shaw said. “So, I will have the painstaking task, once I get freedom, to go probably page-by-page and rewrite a lot of stuff.”

Ms. Mayzler said she found the new look of YogaFit’s site “soothing.”

“I’m really happy with it,” Ms. Shaw said. “I look at it and go, ‘Wow, why didn’t I do this three years ago?’”

For Ms. Shaw, the next step is search engine optimization. YogaFit’s site has had no S.E.O. whatsoever for at least a year, she said, adding that this may be why business is down. Ms. Shaw suspects that when YogaFit’s Web site was updated about a year and a half ago, all of its S.E.O. was wiped out. “Now I’m much more on top of these little things,” she said.

She just hired a firm to handle S.E.O. The first phase of the project will involve cleaning up the code on each of YogaFit’s Web pages for a charge of about $2,500. After that, ongoing S.E.O. will cost $1,500 a month. Ms. Shaw found this price reasonable after talking to another firm that wanted to charge between $2,500 and $5,000 a month. When she asked the firm how long it would take to see results, she said she was told she might not see any.

“It’s not a guaranteed science,” she acknowledged. Still, the answer made her leery. She said the firm she hired sounded “a little bit more optimistic,” and told her that, within three months, she should see more traffic and click-throughs on her site.

Group member Deirdre Lord, who owns the Megawatt Hour, said she’s skeptical of S.E.O. firms and admitted she’s done “zilch” so far to optimize her site. “I feel like you should be able to see major impacts in the first couple of months,” she said, “but these firms, I don’t even know what these firms do.”

“I get stats every day on how many people went to our Web site, so I’ll be able to tell — and I can cancel the contract at any time,” Ms. Shaw said.

Ms. Mayzler also has a new Web site that went live last month. The update was necessary to reflect added offices and programs, refresh the site’s look, and improve functionality. For example, new pages could not be added to the old site.  The new site also offers more information about Thinking Caps’ various programs, but presents it in a streamlined manner. It adds a personal letter from Ms. Mayzler, and photos of actual pairings of students and tutors.  Ms. Mayzler is very happy with the site and said its organization makes it “easier to understand how we do what we do.”

Ms. Shaw asked whether Ms. Mayzler plans to optimize it for search engines.

“I don’t think so,” she replied. She explained that the site really serves as a resource for existing clients. “People don’t generally search for us all that much,” she added.

In addition to getting a new Web site, Ms. Mayzler’s company got a new name, Thinking Caps Group. It was formerly Thinking Caps Tutoring. She said the name change reflects the fact that the company offers broad academic support and not just tutoring, helping students become “independent learners.” She wanted the new site’s URL to match the company name but wanted those who knew the company by its original name to be able to find it. For that reason, she plans to keep the old site up for awhile, and it will re-direct visitors to the new one. “It was painful and slightly inconvenient, but it will just take time,” she said.

What do you think of the new YogaFit and Thinking Caps Group sites?

You can follow Adriana Gardella on Twitter.

You're the Boss Blog: Living the B&B Dream, a Couple Plans to Update an Inn’s Web Site

Nancy Galloway and Andre Laporte are living what is, for many, the ultimate retirement dream: owning and operating a bed & breakfast. Their current challenge is figuring out the best ways to attract visitors to their Web site and, ultimately, to a very remote part of Canada where the nearest traffic light is an hour away.

About 10 years ago, as they neared retirement from their careers as diplomats, Ms. Galloway convinced her husband that the next phase in their lives might best be enjoyed running a picturesque bed & breakfast somewhere in the country. After conversations with a neighbor who was running a consortium of B&Bs, they agreed to test the concept by allowing him to convert the second floor of their home in the Logan Circle neighborhood of Washington into a B&B.

As they learned the industry, Ms. Galloway began the search on BBCanada.com for a retirement location. They considered Montreal and Vancouver, B.C., but both seemed too competitive, so the couple focused on smaller locales and found their answer in the quaint mountain valley town of Crawford Bay, B.C. Population: 250.

In 2003, when Ms. Galloway and Mr. Laporte moved in, the Wedgwood Manor Country Inn had been functioning as a B&B for 18 years, but it was in need of an update. They invested $565,000 to buy the property and over the past 10 years, they have invested another $95,000 in renovations. Their purchase included the six-room main building, two cabins and a pink-themed Web site that demanded a makeover.

It got it at the hands of a longtime friend who was working at a Web-design firm in Ottawa. She revamped the site for $5,000, and the couple spent an additional $3,600 on two photographers. To attract visitors, the designer employed software to better understand what words and phrases people were using to search for vacations. Over the years, when Ms. Galloway updated the copy on the site, she would refer to the same list.

In 2012 the inn generated revenue of roughly $100,000, and the site attracted between 800 and 1,000 visits a month. In an average month, approximately 40 percent of the inn’s Web traffic arrived through search engines. Some 30 percent discovered the business through industry sites like bbcanada.com and cabinrentalbc.com. Because of this, the couple has earmarked $4,000, about 85 percent of their marketing budget, to get the inn listed on relevant sites.

While most nights found the inn at capacity, Ms. Galloway believes a more compelling site will attract a few more guests and also convince more visitors to book their stays online — without making a phone call.  She is also hoping that refreshing the site’s content will attract younger travelers. In recent years, the average guest has been over 50; she is hoping to book more couples and families in their early 30s and 40s, and she thinks optimizing the site for tablets and smartphones will help.

She also wants to market the inn as a place for “B&B people” — as opposed to “hotel people” — by playing up the property’s social feel, where guests can meet and mingle over meals and afternoon refreshments. And she wants to highlight the area’s artisan community and small-town feel.

Before embarking on a Web site overhaul, Ms.Laporte is looking for guidance on the following questions:

- What design elements and information should the site offer?
- What type of information, photography or description is missing or can be improved upon?
- What other factors for a vacation area should the couple include?
- Is it time to update that list of terms? What else could she do to improve search engine optimization.

Next week, we’ll follow up with highlights from your comments and I’ll offer my own impressions along with Ms. Galloway’s response.

Would you like to have your business’s Web site or mobile app reviewed? This is an opportunity for companies looking for an honest (and free) appraisal of their online presence and marketing efforts.

To be considered, please tell us  about your experiences — why you started your site, what works, what doesn’t and why you would like to have the site reviewed — in an e-mail to youretheboss@abesmarket.com.

Richard Demb is co-founder of Abe’s Market, an online marketplace for natural products that is based in Chicago.

You're the Boss Blog: This Week in Small Business: Does Yelp Help?

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Economy 1: Turning the Corner

A Wall Street Journal study of small-business chief executives shows some optimism, and economic confidence is up along with a rise in the stock market. A new survey shows a steady, four-year increase in small-business job growth projections, and Rick Newman says small businesses have finally turned the corner. Housing starts (pdf) increased and new building permits are being issued at the fastest pace since 2008. Existing home sales and prices continued to rise in February, but a report says it’s still cheaper to buy than rent in the country’s top 100 metropolitan areas. Even independent bookstores did better than ever in 2012. Recent good data has economists “falling over themselves” to revise first-quarter growth estimates, but if you really want to know how the economy is doing, keep your eyes on a McDonald’s “eggonomic indicator”: drive-thru windows.

Economy 2: However

January’s jobless rate rose in 25 states. FedEx had a disappointing quarter, Caterpillar reported a slowdown in sales, and even though their ad spending increased 4 percent in 2012, restaurants are reeling from their worst three months since 2010. A consumer metrics wizard displays charts that show that this time around the pain (or economic cynicism) seems to be universal. The Federal Reserve holds firm to its stimulus plan, and Scott Grannis says the central bank is not printing money.

Online: Yelp’s Help

Yelp claims small businesses that advertise on its review platform produce an average $23,000 more a year in revenue. But small businesses still are not spending on online ads, and Cynthia Boris wonders why more are not taking advantage of online marketing. On the other hand, half of what online advertisers think they know about their Web visitors may be wrong. Here are 26 tools to enhance your business blog, eight mistakes to avoid when beginning your blog and eight steps to increase online visibility. Dan Norris says you should use Google Analytics to determine if your content is generating leads, and G.B. Oliver identifies a few recent search phrases that have been trending lately on Google.

Your People: Gloomy

Colleen Stanley says you should stop being in a hurry and say “thanks” once in a while. Venessa Wong explains why Mark Zuckerberg (and other C.E.O.’s) are popular with their employees. Gary Shouldis lists five reasons your business needs an employee manual. Most workers are not saving enough to retire, and a survey finds low-wage workers are gloomy about the future. March Madness will cost businesses $134 million but employers don’t seem concerned. Here are 10 March Madness stars to follow on Instagram. The president shares his N.C.A.A. bracket picks (and the kid president shares his). Booz Allen studies the environmental impact of basketball tournaments.

Women: Silicon Valley Discrimination

Sarah Barrett explains how she became an accidental entrepreneur. Sarah McKinney suggests 10 ways women entrepreneurs and leaders should take action now. Jane Harrow provides a quick guide to 360-degree feedback, especially for women. Vivek Wadhwa says Silicon Valley discriminates against women (but there is hope). Peggy Drexler says there are perks from crying at work.

Management: Problems at Quiznos

Joel Libava reports on the latest problems at Quiznos. A new book offers business lessons from Shakespeare. Ron Ashkenas says there are psychological reasons why stopping activities is so hard to do in organizations. A new report finds that although the incidence of fraud has decreased over all from 2011, 61 percent of companies reported they were hit by fraud at least once. And to put things into perspective, here’s how mom-and-pops fought five-and-dimes back in the Depression.

Cash Flow: The Perfect Vehicle

Wells Fargo topped the list for small-business loans in 2012. Lisa Girard has 10 questions to ask yourself before choosing an office, and here is how to pick the perfect vehicle for your business. Katy A. Limbaugh offers tips for organizing your company’s finances, including: “No business can successfully flourish without a proper projection, planning or budget.” A new financial app will track your business’s health.

Start-Up: Free Online Classes

Roya Wolverson suggests the best age to start a business, and Phyllis Korkki reports that budding entrepreneurs can get an “M.B.A. lite.” Eric T. Wagner says that spending a fortune in time and money to build your brainchild product or service is just one of seven steps to start-up failure, and Mark Suster also has thoughts on the biggest mistakes start-ups make. If you’re still up for starting a company, here are eight free online courses. And these are the best cities for start-ups, according to the Kauffman Foundation.

Ideas: Get Cash From Microsoft

Food scooters might be the next big thing. Or how about a restaurant that serves World War II fare? Or a beverage business? Microsoft is now offering cash to anyone who wants to build apps. British Airways introduces an “innovation lab in the sky.” Nike chooses 10 companies to drive digital sport innovation. This entrepreneurial couple turned their passion for arcade-style video games into profits. MillerCoors awards $150,000 in small-business grants. Ramit Sethi decides to give away two round-trip tickets to anywhere in the United States. The National Small Business Association chooses its Small Business Advocate of the Year.

E-Mail: Expand Your List

Hunter Boyle and Corey Post explain how to expand your e-mail list. A new study says that e-mail volume increased 5.4 percent in the fourth quarter of 2012 over the same period a year earlier (with open rates the highest on Saturdays and Sundays). A social, e-mail and marketing webinar series is introduced.

Marketing: More Mistakes

Will Stevens explains how to run a content marketing campaign with no budget. John Jantsch says that the best way to guarantee that your new offerings succeed is to develop them with your customers instead of for your customers. Here are three ways that technology can improve customer service, and here are five marketing mistakes that 95 percent of entrepreneurs make.

Health Insurance: Three Years of A.C.A.

The Affordable Care Act has its third anniversary, and all eyes are on Arkansas. Some small businesses have figured out a loophole in the health law. CVS tells employees to reveal personal health information or pay up. A small-business owner wonders if her bakery should offer health insurance. This insanely complicated chart will help you determine if you can get health care. A study finds that the A.C.A. is not causing a big shift to part-time workers.

Taxes: Get Help

Brian Sutter shares five tax-season tips for small-business owners. Deborah Sweeney says that new tax credits and deductions could help small businesses expand this year. A new Internal Revenue Service tax tip explains the home-office deduction.

Around the Country: Flies, Maggots, Rats

A New Jersey poll finds small-business owners oppose a minimum-wage increase. A news anchor reads her own marriage proposal from a teleprompter. A huge oil deposit is found in the Gulf of Mexico. What “Big Ag” does not want you to see: flies, maggots, rats and waste. Stephen Colbert’s sister wins a Congressional primary. Manufacturing improves in the Philadelphia region, and the Philadelphia City Council passes a sick leave bill. A guy who won’t share his ice cream with his girlfriend is analyzed mercilessly.

Around the World: Panic in Cyprus

Cyprus creates a financial panic, but Mike Shedlock believes there is good news for some. Inflation hits a nine-month high in Britain and the government chooses more austerity. The World Start-Up Report provides a 15-minute guide to India’s start-up scene and culture. Jeremy Glass offers a D.I.Y. guide to being a hipster. German investor confidence unexpectedly rose to a three-year high but global steel output fell in February. McDonald’s gives away five million McMuffins in Asia. This kid has a point about tests.

Mobile: Should You Bother With Apps?

The C.E.O. of GetApp.com says that understanding the pricing model is just one thing you need to consider when trying to find the best apps for your small business. But Mariana Simoes believes that most small businesses shouldn’t bother with apps. In a new survey, 63 percent of consumers say they may buy from an e-mail read on a mobile device, while the number who may unsubscribe because of poor mobile display exceeds 30 percent. Fast Company finds the experience of using Square Wallet at Starbucks is “anything but polished.”

Technology: Amazon and the C.I.A.

Anne Czernek sums up the big trends from this year’s SXSW, and here’s how a few smart companies managed to set themselves apart from the crowd. Google introduces a competitor to Evernote, but will it just end up in the company’s graveyard? Microsoft Office “Luddites” explain why they will never give up their DVDs. Amazon may be entering into a deal with the C.I.A. Gerald Dicen has some advice about cyberinsurance for small-business owners. Staples releases an app for small-business owners. Sage sells off its ACT! and SalesLogix businesses. Here are five steps to create a cool, safe place for your data.

Tweet of the Week

@MaxGoldberg – I honestly think my favorite part of owning my own business today is having a landline.

The Week’s Best

Ross Kimbarovsky wonders if you know how to market and sell to squirrels: “The attention span of a human adult, according to BBC News, is nine seconds (The Associated Press reports that in 2012, the average attention span for a human was eight seconds). Nearly one-fifth of all page views in 2012 lasted fewer than four seconds. And to add fuel to the fire, people read only approximately half of the words on a Web page that has fewer than 111 words (and only 28 percent of the words on a Web page that has more than 593 words). If you’re still reading, then you’ve obviously decided that this content had some value and was worth your time.”

This Week’s Question: Do you think Yelp helps?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

You're the Boss Blog: How Data Analysis Led Us to Reassess Sales and Open a Lead-Generation Center

Hiring, firing, and training in a new era.

Here is a quote I love from “Good to Great,” the Jim Collins book: “But once we looked at the facts, there was really no question about what we had to do. So we just did it.”

At H.Bloom, we try to live by that principle, which is why we are always collecting data, analyzing the evidence, and making decisions to improve the business based on these facts. Here’s an example.

Since we got started in April 2010, the company has experienced fast growth, more than doubling revenue last year. The majority of our revenue comes from corporate customers – hotels, retailers, residential buildings, commercial buildings and offices – who subscribe to our weekly flower-delivery service and/or our plant-installation and maintenance service. We acquire these corporate customers through a direct-sales force. We have account executives in all of our local markets – New York, Washington, Chicago, San Francisco and Dallas – who make cold calls, send e-mails, have sales meetings, give presentations, and close deals. The unit economics of our corporate business is terrific today: for every dollar of sales expense, we receive many dollars in lifetime value, measured as gross profit.

But we can always do better.

Our director of sales operations, Kim Scott, is no stranger to quantitative analysis. Equipped with an undergraduate degree from M.I.T. and a Masters Degree in Engineering from the University of California, she digs into the details of our sales team’s activities to optimize our sales process. The members of our sales team use Salesforce to track leads, sales opportunities and signed customers. As a result, we have a lot of data on the dynamics of our sales funnel; we can see the number of new leads that go into the top of the funnel and our conversion rate prosecuting those leads.

In Kim’s review of the data recently, she spotted some interesting facts. Our account executives are really good at closing deals when they have the opportunity to meet with a company in person. The conversion rate for even a brand new account executive is more than 20 percent given an in-person meeting. For account executives with at least a year at H.Bloom, the conversion rate rises to 52 percent! This is a phenomenal  rate and leads to a very simple conclusion: H.Bloom account executives should meet in person with a lot of companies.

Based on the data, Kim asked how we might increase the activities that create in-person meetings. She returned to the facts, and she noticed something else: Almost all of the activities – sending e-mails, making phone calls – that lead to in-person meetings are done remotely — 96 percent, in fact. That means that these activities do not have to take place in our local markets. Yet, until this point, our local account executives – the very same folks that go on the meetings and close the deals – had been responsible for generating those leads and filling the top of the sales funnel.

Our vice president of sales, Tom MacLeod, grasped the opportunity immediately: we could invest in lead-generation specialists to increase activities, which, if our conversion rate stays the same, would dramatically increase our new subscription customers and therefore increase monthly revenue. Moreover, because the majority of activities that lead to in-person meetings are done remotely, we could establish a lead-generation center in a place that is less expensive than our headquarters in New York City, providing a second potential benefit: a lower cost of sales.

Rebekah Rombom, who heads talent at H.Bloom, got involved to work with Tom and define the roles and determine how to build this new team. First, they chose a location for the new lead-generation center: Pittsburgh. It is a great town, surrounded by many terrific colleges that provide an educated employee base. It is a short flight from New York and much less expensive. And, it is a city both Tom and I know well. In fact, I was born in Pittsburgh and grew up just outside of the city in Wheeling, W.Va. (I’m also a lifelong Steelers fan, so having an office in Pittsburgh brings a fringe benefit, particularly during football season!).

Second, Rebekah and Tom defined the role we were looking to fill: account development specialist. These will be people with outstanding communication skills – both written (for e-mails) and verbal (for phone calls). They will be highly driven, ready to complete 100 activities per day in order the fill the pipeline for local account executives. They will be highly competitive, undaunted by the challenge of a daily quota. At the same time, they will work well with others, both on the account-development team and with the local account executives who will be the recipients of leads from the account-development specialists. Finally, they will be motivated to be part of a fast-growth start-up, knowing that their activities will have a direct impact on the performance of the company.

We expect to see a significant increase in new customers and monthly revenue.

Next week, I’ll talk about the recruiting campaign and interview process that we use in Pittsburgh. I plan to cover our entire hiring process for this new team in future posts: recruiting, interviewing, onboarding, training and results.

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

You're the Boss Blog: This Week in Small Business: The Silly Money Ratio

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Small-Business Must-Reads

Matthew Yglesias explains how not-in-my-backyard stupidity is blocking an opportunity for small-business growth. A dongle joke at a tech conference spirals way out of control. Bryan A. Garner provides a comprehensive “bizspeak” blacklist that bans phrases like “mission critical” and “ducks in a row.” A company that manufactures a handheld vaporizer is just one in a wave of start-ups taking advantage of relaxed marijuana laws. Opportunities in the wedding, adoption and divorce industries are only a few reasons Bill Murphy Jr. believes smart entrepreneurs should care about gay marriage.

The Economy: Reconciling Budgets

The president signs a stopgap funding bill, and the Senate and House must now reconcile their budgets. The stock market closes at a record high, but the silly money ratio hits its highest level since 2007. Economic growth is revised upward, home prices rise the most since mid-2006 and orders for durable goods increase. Weekly mortgage applications go up, but consumer confidence falls.

People: Office Jokes

A group of former employees from the outsourcing firm oDesk raise $4.5 million to finance a rival start-up. Observers offer 5 musts for hiring great employees and 10 perks most American workers don’t get. The federal government spends more money each year on disabled former workers than it spends on food stamps and welfare combined. A Powerball winner and bodega owner could have a rocky road ahead. Christy Schutz says “office jokes” are one of the things she misses about working in an office. This infographic lists reasons not to get an M.B.A. And will the “Office Brothers” help save this small business?

Retail: Just Looking?

A store combats “showrooming” with a $5 just-looking fee. Lululemon is making its customers “bend over to verify sheerness” before issuing a refund. Wal-Mart plans to test online delivery lockers in its stores. Bob Phibbs explains how using the personality styles of your customers will help you make more retail sales. Robert Moskowitz offers a few good tips for keeping your business safe from repeat robberies. Restaurant sales rise as tax refunds catch up, but a study finds that deals and discounts are no longer driving restaurant traffic. A few top eateries are warming to British-style tea. A start-up plans to do away with the payment process in restaurants so diners can eat and leave.

On the Road: Power Up

American Airlines decides to let customers without bags board first, and airline passengers may soon be able to use electronics during takeoff and landing.

Management: Brain Training

Business and labor groups reach agreement on immigration. A study indicates that American companies and entrepreneurs enjoy one of the most business-friendly climates in the world, but small-business owners are still frustrated by lawmakers in Washington. Business leaders say small businesses need advisory boards. Alisha Webb suggests five things entrepreneurs can learn from Coca-Cola. Studies indicate that “brain training” can make you a smarter owner. Kevin D. Johnson explains why ignorance can be bliss in business. Glenn Muske says you should stay visible by using marketing, media and mingling. A study suggests women make better decisions than men. Three thoughts promise to make you happier, and five people are put forth as small-business committee staff members who every small-business owner should know.

Health Care: A Bonanza for Start-Ups

A survey reveals that 83 percent of large and mid-size employers offer workers some incentive to participate in health-related programs, while another report finds that most companies plan to impose consequences on employees who don’t try to improve their health. Employers who seek to reduce their exposure under the Affordable Care Act’s “play or pay” mandate in 2014 by reducing their employees’ hours may risk penalties. Hamish McKenzie says Obamacare is a bonanza for start-ups. The health care law may have created 111 million hours of paperwork, but Magic Johnson says it’s working. Barbara Weltman sums up what the law means for your business.

Cash Flow: Solar Power

Outsourcing tasks is among the tips suggested by Kasey Navita Phifer for keeping costs low when starting a small business. Communication is crucial in order to set up and nurture a partnership. A team of solar experts explains why your business should consider solar power. Steve King reports on the rise of small-business crowdfunding. Dave Bui shares 10 winning principles for wholesale imports.

Marketing: Grouponicon

Valeria Maltoni says customer data is your biggest advantage. Nora Richardson has five tips for better brand recognition. If you want to attract more customers through events, here are 4 reasons virtual conferences rule, a few ideas for creating more effective webinars and 10 free Web conferencing tools. Groupon holds its first Grouponicon for small businesses in Dallas.

Social Media: Pinterest for Guys

Tumblr now hosts more than 100 million blogs. Flipboard opens up magazine creation to the masses. A webinar will explain how to jump-start your business using social media. Lauren Dugan says there are five elements to a great Twitter strategy. Andrea Vahl explains how to set up a Facebook page for your business. Consider these four social media sites you may not be using but should. Jeff Korhan explains how to be the best-connected business. Researchers say there is a link between customer use of social media and higher revenue. And thank goodness: there’s now a Pinterest for guys. This is how to speed up your Web site, increase your online visibility and make Google AdWords an effective and profitable marketing method for your business. And here’s a beginner’s guide to search engine optimization. These are the top three affiliate marketing niches for the home entrepreneur. Todd Giannattasio explains how to do online marketing right, and Justin Fishaw lists three ways to improve your content management strategy.

Around the Country: Hurricane Mistakes

A zombie television show turns a Georgia town into a tourist hub. Manufacturing in Texas and Chicago picks up while activity in Richmond, Va., slows. Seattle home prices post their biggest gains in nearly six years. Business owners in the New York area discuss the mistakes they made leading up to Hurricane Sandy. The head of the Small Business Administration tries out mattresses in Norfolk, Va. The S.B.A. joins state and local officials to recognize Chicagoland’s small-business exporters. A competition in Minnesota that supports and accelerates the development of business ideas from across the state opens for entries. Philadelphia hosts a conference on emerging technologies this week while a nearby baseball stadium offers urinal gaming. An Ohio prosecutor drops all charges against Punxsutawney Phil. The new season of Shark Tank is looking for entrepreneurs in five cities, and a search has begun for American college students who possess the entrepreneurial ambition to start the next global brand. And if you’re a recent college graduate, your best opportunities may be in Austin, Tex.; San Jose, Calif., and Washington.

Around the World: $30 Million for a London Schoolboy

Cyprus (whose economy is smaller than Akron’s) gets a bailout. Students from all over Russia visit a 16-year-old’s site to learn about math, physics, literature, scientific breakthroughs and curious facts. Anna Hein takes an in-depth look at Start-Up Brasil. Palestinians are reaching for a tech start-up future. China creates a tax-free zone for art. The Bank of England reports that British banks have a capital shortfall of $38 billion, but Blockbuster Video still is rescued. A London schoolboy sells his app to Yahoo for $30 million.

Taxes: Everyone’s Waiting

Paul Shread advises small businesses to avoid several tax mistakes. Steven Sloan says that everyone is waiting for corporate tax reform, and Congress is considering making a very popular small-business tax deduction permanent. The Internal Revenue Service apologizes for its $60,000 Star Trek parody. Small businesses in Tennessee may be receiving a tax holiday.

Technology: “Ungoogleable”

Apple acquires an indoor location company. Google is trying to prevent Swedish language officials from adding “ungoogleable” to their official word list. Big data is going to blow your mind in five ways; 15 BlackBerry apps offer to increase productivity and security. Erik Wolf learned three important lessons from introducing his software product. Francesca Gino warns that the next time you are on your computer to chat or text, you should consider raising the blinds and asking the person on the other end to do the same. New technology may soon replace credit cards with fingerprints. The United States is seeing a surge in mobile patents. Here are a few ideas for making your blog mobile-friendly, and Hillel Fuld explains how to use mobile-friendly content to fuel your blog’s success.

Tweet of the Week

?@ReformedBroker – The last time the Dow advanced 9 consecutive days it was 1996 and we were listening to the Spice Girls. Oh sure, it was just me.

The Week’s Best Quotes

Brian S. Cohen explains in his just-published book what angel investors are looking for: “Entrepreneurs who most impress angel investors are the ones who deeply know their customers. They have done research into the demographics of their typical customers: age, gender, geography, lifestyle, income, aspiration, brand preferences, shopping habits. They know what their behavior and thinking is because they've spent time with them. They even learn which words and phrases resonate most with customers. This research doesn’t come cheap or easy, but it’s available with a little work.”

Maneesh Sethi explains how to make it impossible to fail: “The secret is called precommitment. Precommitment is the process of making a promise, when you are in your sane state, that will prevent your tempted insane-emotional-id-self from doing something bad. Precommitment is the process of creating an environment that forces you to succeed. You might not be able to find a month to hike in the wilderness, but there are still ways to use precommitment in your normal life.”

This Week’s Question: Are your ducks in a row?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

You're the Boss Blog: My Search for a Credit Card Processor, Part 3

The struggles of a business trying to survive.

In Wednesday’s post, I wrote about my decision not to accept the credit card processing offer I had received from Emerald World. That left me at PNC, where I had my business accounts and where I now understood that I was probably paying more than necessary for card processing.

I decided to take the time to consider switching banks, and I did some looking around. In the end, I focused on two relatively large banks: Citizens Bank, which had acquired Mellon Bank, where I had banked throughout the ’80s and ’90s, and Wells Fargo, which had swallowed up the bank that had my personal accounts.

I met with a banker from Citizens first. He and I had been working together for some years — he has tried hard to get me to switch all of my banking to Citizens, and I have played coy. But now I was ready to make the switch, as long as I got a good deal on merchant services. Still smarting from my experiences with PNC and Emerald World, I told him up front that credit cards were going to make or break the deal.

He quickly arranged a follow-up meeting with a sales person, Dale, who works for WorldPay, the card processing firm associated with Citizens. Just as I had with Emerald World, I provided Dale with a couple of my merchant services statements to analyze, and she came back with some extremely attractive pricing: My cost for each transaction would be the interchange fee associated with the client’s card plus 0.1 percent. This compared with the interchange plus 2.1 percent I was paying PNC and the interchange plus 0.98 percent that Emerald World had offered.

That sounded outstanding, but now I knew what might be coming, so I laid it out for her: I didn’t want to have to put up a reserve account to do business. I was a good customer, with a perfect track record, who would be generating substantial fees. My regular operating accounts had plenty of cash in case there was a chargeback. She promised to do her best.

The meeting with Dale happened on a Friday afternoon. The following Tuesday she called with news: the underwriters at WorldPay wanted a reserve account, too. “How much?” I asked.

She responded: “Forty thousand dollars, funded by taking out 10 percent of the first $400,000 in transactions.”

I was floored. This was four times the amount that prompted me to reject Emerald World. I told Dale it was unacceptable. She promised to go back and see what she could do.

A couple of days later, she called back: “Great news! I got them down to $20,000.” I wasn’t super excited about that, but the pricing on the transactions was so low that, even with the reserve account, the deal made some sense. My cash position when we had this conversation was good, much better than it had been in the summer. And a $20,000 reserve fund certainly wasn’t out of the question if it would save me $10,000 a year or more in processing fees.

So I asked her some questions about the reserve account. Whose name would it be in? Where would it be located? Would I have access to it through the Web and be able to check balances the way I could my regular accounts? Would its necessity be reviewed on a regular basis? If I ended my relationship with WorldPay, how long would it take for me to get the money back? These did not strike me as unreasonable questions, considering that it would be my money in the account. Dale promised to find out.

She called back a couple of days later and told me that the reserve account would be operated according to its description in the merchant services agreement. This prompted me, for the first time, to take a close look at the agreement. Every deal I have ever seen includes one, but they vary somewhat in length and format. They are close cousins to the ubiquitous agreements that you encounter on Web sites, and their appearance — the size and type of font used, the overall layout of the document, the tiny text packed in dense blocks — seems designed to prevent easy reading and comprehension. But in general, the agreements I reviewed were written in standard English that was possible for me to understand.

The agreements define the entire scope of the interaction between processor and merchant. The best of them, the PNC agreement I had signed in 2005, was quite readable, once you got past how it looked, and it actually had useful advice about avoiding problems with customers and what to do to prevent chargebacks. The Emerald World agreement was much closer to unreadable: dense blocks of text, lawyerly prose, clearly intended to cause eye glaze. The WorldPay and Wells Fargo agreements fell between those extremes.

When I reviewed the WorldPay agreement, I was most interested in seeing what it said about reserve accounts, and I found the relevant language easily. It was quite unsettling. Who would hold the money? WorldPay. Would I have access to any information about what was in the account? Not specified. Would the original, agreed-on amount — in this case $20,000 — be sufficient? WorldPay would decide, and it could increase the amount any time it wanted at “WorldPay’s commercially reasonable discretion.” WorldPay could also take more money straight out of my bank accounts any time it wanted without notice.

In fact, every aspect of the deal was subject to “WorldPay’s commercially reasonable discretion.” Ultimately, WorldPay could demand any amount it wanted, it could raise or lower that amount whenever it wanted, and it could keep it for as long as it wanted — even if the agreement had terminated. There was no mechanism for review or appeal by me. I went back and forth with Dale a few times, trying to find some way to modify these terms, but it was no dice. So I rejected the deal. Sort of.

In effect, without realizing it, I had already accepted it. Only now, reading carefully through the WorldPay agreement and then checking the separate form that Dale had filled out when we first met, did I realize that my signature on the application, which I had considered routine at the time, indicated that I agreed to the terms and conditions. And two of the terms and conditions were particularly interesting in this context.

The first stated, “This agreement shall be binding upon the customer upon the earlier of (a) the date upon which the first transaction is processed by WorldPay … for the customer, or (b) the execution of this agreement by the customer.” And that had happened when I signed the application, directly under text that stated, “By signing below, I (1) agree to the WorldPay terms and conditions for customer processing agreement.”

The second of the terms I found interesting was that I was agreeing that WorldPay would be my exclusive merchant provider. “Customer agrees that throughout the term of this agreement, it will not use the services of any bank, corporation, entity or person other than WorldPay to provide services similar to those contemplated by the Agreement.”

Technically, though I had entered it unwittingly, the agreement was already in force. I went back and checked the PNC agreement I had signed in 2005. It said the same thing. Apparently, simply by applying for WorldPay’s services, I had violated the PNC agreement. I looked at the Emerald World application and found the same language. That meant I had contracted with all three processors, and I was violating all three agreements.

So far, no one has made an issue of it. But forewarned is forearmed, so when I set up a meeting with the Wells Fargo bankers, I decided to play the negotiations a bit differently. I wanted to see if I could clear up the reserve account issue without signing another agreement.

Wells Fargo seemed eager to make a good impression. It sent over a team of four bankers in nice suits, an unusual sight in my office. And they too quoted attractive pricing: interchange plus 0.55 percent, cheaper than Emerald World but more expensive than WorldPay. I laid it out for them just as I had for Citizens: I was interested in transferring all of my business banking, but the merchant agreement would be the deciding factor. I told them about my experiences with WorldPay and Emerald, and I said that I wanted to know whether a reserve account would be required, exactly how much it would have to be and whether I would have access to the account when I wanted.

The Wells Fargo sales person said she would do her best to come up with answers. I don’t know what battles she may have fought when she went back to her office, but it took her several weeks to get back to me. And in the end, she wasn’t able to come up with information as to whether a reserve would be required — unless I signed the application.

That’s because underwriting would make that decision, and underwriting wasn’t going to say anything until I signed. Which I was unwilling to do, because the Wells Fargo application, like the others, indicated that by signing, I was accepting their terms. And the terms stated that the reserve amount would be subject to the decisions of Wells Fargo, without my input. It could come back with any number at all, and it wouldn’t be revealed until I had agreed to buy.

Would you buy a house, a car, or even a candy bar, under those terms? On top of that, every credit card agreement I saw required my personal guarantee, as officer of my company, to pony up my own money if things went bad. And there were so many ways they could go bad. I have substantial personal finances in Wells Fargo accounts — it appeared that just by signing the application I would be putting them at risk. I rejected the deal.

Friday: I draw some conclusions — and make a decision.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

You're the Boss Blog: House Republicans Try to Simplify Small-Business Taxes

How small-business issues are shaping politics and policy.

This month, Republicans in Congress unveiled proposals to radically remake the way many small businesses are taxed. As with many radical Republican proposals, this one from the House Ways and Means Committee chairman, David Camp, furthers a partisan agenda — if implemented, it would almost certainly reduce revenue to the federal government. But it also wins praise from independent tax experts for repairing what they call a body of law almost too complicated to comply with or to enforce.

The proposals would streamline the tax rules for flow-through entities — companies that do not file their own tax returns but instead are structured to pass their profits or losses directly to their investors, which is how many small businesses are organized. “The tax code ought to be easier to understand and less expensive for small businesses to comply with,” Mr. Camp said in a press release accompanying the draft legislation (pdf), “because every dollar they aren’t spending on taxes is a dollar they have to invest in equipment, start a new production line, hire a new employee or provide more in wages and benefits.” But it is unclear how much most small businesses will benefit from the changes Mr. Camp has proposed.

At the heart of Mr. Camp’s ideas, embodied in an early stage of legislation known as a discussion draft, are two alternatives to revamp the rules for the two main kinds of flow-through structures, partnerships and S corporations. S corporations, named for a section of the Internal Revenue Code, operate like regular corporations and are governed by fairly rigid rules, while partnerships are granted more flexibility.

The first alternative mostly tinkers with the rules to make it easier to operate as a flow-through company. The second option would repeal the laws regulating both kinds of entities and replace them with a single set of rules, regardless of whether the company is organized as a corporation or partnership. The new rules would be based mostly on current partnership law, with a couple of S corporation provisions thrown in (they also include most of the changes proposed in the first option). Any partnership or privately held company that is now eligible to elect S corporation status would be able to file taxes under the new arrangement.

Tax lawyers and analysts cheered the prospect of simplifying this area of business taxes. “Many professors and academics who study partnership law felt like the whole partnership system was falling apart, because it had become so complicated and not administrable,” said Martin Sullivan, the chief economist for Tax Analysts, the tax news and analysis publisher. “The I.R.S. was having trouble enforcing the law. Even the most sophisticated taxpayers could not comply with the law. Everybody had to adopt an informal, ad hoc process.”

Businesses, though, may be less enthusiastic about a one-size-fits-all regimen. Many more small companies are organized as S corporations than partnerships, and S corporations, especially those engaged in more complex businesses, may find that filing their taxes is more complicated under the new regime, though tax experts disagree on how much more complicated. On the other hand, Mr. Sullivan said, these businesses may appreciate the additional flexibility — for example, they would no longer be limited to just 100 shareholders or face restrictions on the type of shareholders.

Partnerships, meanwhile, would find some of their options limited, particularly when it comes to strategies for avoiding taxes. Steven Schneider, a Washington tax attorney and an adjunct professor at Georgetown University Law Center, said that S corporations and partnerships are often organized in different circumstances. S corporations often build their assets from scratch, for example, while investors in partnerships often contribute existing, and valuable, property to the venture. But one element of the overhaul, imported from S corporation law, could make investors reluctant to contribute that property to the partnership, because it would require those investors to pay tax on the asset’s built-in gains should the partnership dissolve. (Built-in capital gains are the increase in value of an asset that occurs before it becomes part of a new venture.)

“They took a rule that made some sense in S corporations because it’s simple but applied that to partnerships, which were intended to allow flexibility to allow people to get together and break up again,” Mr. Schneider said. “So if I want to do a joint venture with another big business, I’m going to really think about it if I’ll have to recognize all my inherent appreciation.”

Though provisions like these would force entities to recognize more taxable income, overall the proposal would likely cost the government money, said Mr. Schneider and Steven Rosenthal, a visiting fellow at the Tax Policy Center. That is because it would encourage existing C corporations — whose profits are taxed twice, first at the corporate level and then on shareholders’ individual returns — to convert to flow-through entities. The sweetener is a provision that would make it easier for the new entity to shield the built-in gains on assets it sells from a 35-percent tax. Right now, thanks to a temporary stimulus incentive, a company only has to wait five years before selling those assets to avoid the tax. In 2014, the waiting period reverts to 10 years. (The rule is meant to discourage companies from converting simply to avoid the tax.) Both Camp proposals would make the five-year period permanent.

It is not clear how much support either proposal will win from Democrats, though some elements of the first option have appeared in bills sponsored by a Democrat, Ron Kind of Wisconsin. In a statement, the top Democrat on the House committee, Sander Levin of Michigan, called for more study on small-business tax policy.

Mr. Camp and Mr. Levin have invited small-business owners who might be affected by the proposals to submit comments to the committee. The suggestion box will be open until April 15 — Tax Day. Of course, as always, Agenda readers can comment below.

You're the Boss Blog: The Small Picture: A Family Affair

Courtesy of Prepster Pineapple Taken at the end of a recent photo shoot in Hawaii.

We recently asked small-business owners to send us photographs that capture the soul of their businesses in a single shot.

This one comes from Jennifer L. Schiff of Prepster Pineapple in Wilton, Conn.:

The soul of my small business? That girl in the middle of the photo, my teenage daughter, who created Prepster Pineapple, and my husband (left), an entrepreneur, who challenged me to not just write about small business but to actually start one (and is my spiritual and technical adviser). While I technically own and run Prepster Pineapple, a brand-new line of comfortable cotton clothing designed by a teenager for teenagers, it is a family affair. We literally put ourselves into the business (in this case, T-shirts). And that is what this photo, taken at the end of our recent photo shoot on Hawaii, shows — our love for each other and our pride in what we have accomplished together.

You can see more Small Picture photos here. Can you capture your business in a single photo? If so, please submit it here.

You're the Boss Blog: Social Media and the Not-So-Sexy Business

Courtesy of Patrick Driscoll Residential Remodeling. Patrick Driscoll (left) with Parker Cook, a carpenter, and Murphy.Generating revenue along with the buzz.

My favorite thing about writing for this blog is when someone gives me a social media challenge. On a recent post, Where Should I Invest My Marketing Dollars? a business owner from Texas who identified himself as “PW” left the following comment:

I think the problem businesses like kitchen installers, plumbers, tree trimmers and others are having when it comes to social media is to overcome the fact that their product or service is not necessarily cool. I am one of those business owners and I always think that social media is only for the coffee shop, graphic designer or the bike shop. When you own a roofing company or a cleaning service, is there really a (useful) place for you on FB or Twitter? Let’s be realistic, no one is going to repin the picture of a concrete driveway. So how do you build a network of followers when your product is as unattractive as removing raccoons from attics?

This reader was so frustrated that he came back the next day and left a follow-up comment, “As I read my comment this morning, I realize the answer to the problem: There is no appropriate social media outlet for contractors.”

Actually, it wasn’t much of a challenge at all to find a few examples of not-so-sexy businesses that are doing great things with social media. Here are three stories that may help you see some possibilities.

“If you want it done right, you call Dynamite!” is the slogan of a Philadelphia-based exterminator, Dynamite Pest Control. Led by Rich Foreman, 34 and a second-generation exterminator, the five-person business uses social media as its only form of advertising. Every Valentine’s Day, Mr. Foreman posts a photograph with “I ? U” spelled out using dead cockroaches — a promotion that always drives comments to the company’s Facebook page.

Mr. Foreman, who believes that any comment is a good comment, says he is always amazed by the response his photos elicit from fans — and also from a few detractors. “Facebook is our most effective social media tool,” he said. “We post pictures of our work, and people share them, and we believe 75 percent of our new business comes from Facebook.”

He also uses Instagram and his personal LinkedIn profile to generate business. “We’ve been able to build relationships with real estate developers and property managers, which represents 10 percent of clients,” said Mr. Foreman, who also belongs to two LinkedIn groups where pest-control technicians share best practices and strategies. He does acknowledge that he gets complaints from people who are disgusted by his photos, but he says he also gets business. He said he does try not to post anything too bad around lunchtime. “The folks that complain don’t have pest issues,” he said. “The others are glad that we remind them what we do.”

Istueta Roofing is a YouTube superstar that has been putting roofs on Miami homes for more than 28 years. Three years ago, it started working with Surefire Social to update its Web site and to improve its search engine optimization. One of the first strategies it put in place was to start creating videos of the company’s work and to provide educational and how-to videos for homeowners.

One call from a customer ended up changing the business. The customer reported some bats under its roof, and armed with a video camera, Istueta went out to install a new roof. The video that resulted has received nearly two million hits on YouTube and made the company a household name in south Florida. The video sent a lot of traffic to the company’s Web site, and Ariel Istueta, the company’s marketing director, says it increased business significantly. “When we talk to prospective clients,” she said, “the bat video is often mentioned, and other contractors call our owner Batman.”

Patrick Driscoll, who owns Patrick Driscoll Residential Remodeling in Exeter, N.H., is active on many social media channels but credits writing how-to articles with generating most of his leads. For the last five months, Mr. Driscoll has written a monthly column for his local paper, The Portsmouth Herald. He makes use of the column on Facebook by sharing links from it on his fan page and in other social media accounts.

More than half of his new customers, Mr. Driscoll said, hire the four-year-old company after reading his articles. On Facebook, he posts photos of his construction projects along with tips on how to decorate and where to get materials. Being active on Facebook and Twitter, and commenting on remodeling trends for various articles, helps the company’s search ranking on Google, said his wife, Stephanie, who has her own public relations firm and handles Mr. Driscoll’s social media marketing. “This is very helpful for prospective customers, because when they go to Google him and find that he is published in several articles and takes pride in maintaining his image online,” Ms. Driscoll said, “it is often the tipping point for choosing between P.D.R.R. and other contractors.”

How about you? Do you know of a not-so-sexy business that is making the most of social media?

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media strategy and content development company. You can follow her on Twitter.