Small Business Reading Room

Friday, August 12, 2005

J-Walk Blog Link Experiment

If it doesn't happen by accident, it must happen because someone cared enough to find out.

John Walkenbach takes the latter approach.

This is an experiment to see how "findable" blog references are. Put me to the test, fellow bloggers.

Want to know what we're talking about?

Find out at the J-Walk Blog Link Experiment.

Thursday, August 11, 2005

Disney at the speed of Delaware

The Disney case Melissa mentioned in her most recent post got settled remarkably quickly. The Delaware Business Blog goes into more detail.

What gender is YOUR website?

New research conducted at the University of Glamorgan indicates that women find web sites designed by women to be more attractive and men like websites designed by men.

Gender bias or natural difference? It turns out women like flowing lines (horizontal) and more color in text and background. Men like straight horizontal lines and darker colors.

This research could have a significant impact on website design for those that are trying for a broad appeal. If a way is found to integrate both, can a website appeal to both sexes?

Reminder: Time to pay the taxman- Aug. 15th

This is just a friendly reminder for taxpayers and tax professionals who requested an automatic four-month extension for filing their 2004 federal tax return. The extension deadline is this coming Monday, August 15th.

Time files when you are having fun.

Wednesday, August 10, 2005

Super Directors Clarified

The changes to Title 8 of the Delaware General Corporation Law have allowed new flexibility in naming super directors. The text of the changes is available at the State website.

From the synopsis:
"The amendments to Section 141(d) provide that the certificate of incorporation may confer greater or lesser voting powers on one or more directors, whether or not such director or directors is or are separately elected by the holders of any class or series of stock."

A Decision for Disney

The trials and tribulations of The Walt Disney Co. have been discussed previously in our blog. Think back to Alan's August 27, 2003 blog when he first discussed the limitations of directors' liabilities. Now, after years of litigation and a lengthy trial in Georgetown, Delaware, there is finally a decision for Disney's directors.

The decision is not a stretch for those familiar with Delaware corporate law. As quoted from an article on,
In 1986, Delaware lawmakers passed a law to protect directors by allowing
companies -- through provisions in their charters -- to limit and, in some
cases, eliminate a director's financial liability for certain mistakes.

Only in cases of disloyalty, bad faith or intentional misconduct can
directors be held liable under the law.

In his 174-page opinion, Chancellor William B. Chandler III ruled that the directors did not act in bad faith when they awarded Michael Ovitz a $140 million severance package after serving as President for only one year.


Difference between security and trust

Russell pointed out a nice blog post from BizzBangBuzz that referred to another on marketingprofs. The post was about securing an ecommerce site. I agree that security is important. Nobody should do business with a site that is not secure. But there is a lot of trust building that must occur before the customer is willing to click on the "BUY NOW" button.

It is also very important to provide the clues to trustworthiness. They include providing a contact snail mail address that is not a PO Box, providing phone and email contact points, openly discussing your privacy policy and making your relationship with the customer clear.

There is little a start-up can do about longevity, but many small companies try to hide their smallness and it looks like they are hiding something else. The most trusted security in the world is no good if it only gets your personal information into the hands of a disreputable organization safely.

Creating an LLC Operating agreement

I just visited what is quickly becoming one of my favorite blogs- BizBangBuzz.
Attorney Anthony Cerminaro points the way to an article at FindLaw- Creating an LLC Operating Agreement.

Here's a preview of what you can expect to read there:
What to Include in Your Operating Agreement
There's a host of issues you must cover in your operating agreement, some of which will depend on your business's particular situation and needs. Most operating agreements include the following:

  • the members' percentage interests in the LLC

  • the members' rights and responsibilities

  • the members' voting power

  • how profits and losses will be allocated

  • how the LLC will be managed

  • rules for holding meetings and taking votes, and

  • "buy-sell" provisions, which establish a framework for what happens when a member wants to sell his (or her) interest, dies or becomes disabled.

While these items may seem fairly straightforward, each has important details.

Remember, there is nothing like the advice of a good attorney- but it doesn't mean that you can't be involved in writing your operating agreement or have an understanding what goes into the construction.

Tuesday, August 09, 2005

SCORE calendar

The following SCORE(Service Corps of Retired Executives) events are on the calendar in Delaware;

Aug, 10 - Market Research workshop
Aug, 11 - Networking Mixer
Aug, 11 - So You Want to Start A Business?
Aug, 15 - Current Business Trends Book Club (Call 302.737.4343)
Aug, 16 - Effective Business Plan Writing Made Easy (pt1)
Aug, 17 - Market Planning workshop
Aug, 23 - Effective Business Plan Writing Made Easy (pt2)
Aug, 24 - Understanding Cash Flow workshop
Aug, 30 - Consultants' Forum Peer-to-Peer Discussion Group (Call 302.737.4343)

This land is my land

The Delaware response to the U.S. Supreme Court's decision in Kelo v. City of New London is on track. Unfortunately it is a slow train.

The House of Representatives passed House Resolution 44. The resolution authorizes the Speaker of the House and the Senate Pro Tempore to create a commission to study possible solutions and recommend legislation.

This does not seem like such a tough thing to do. They should simply outlaw the taking of private property for other than "public use". Then define public use in a way that the people understand. done.

It sounds like they want to make sure they are not doing anything similar before tackling this issue.

Is Paying Down Your Mortgage Always the Right Move?

I recently came across a question submitted to "Ask the Expert" at that really hit home for me personally. I just bought my first house in March and many people told me I should make extra payments to the mortgage company each year. I took the advice and now I'm not so sure if it was the right decision.

The question was:
My wife and I are both 28 and contribute enough to our 401(k)s to get the full company match. We are putting most of our extra money towards paying down our mortgage. Is that a good use of our money or should we be investing more for retirement?

According to expert Walter Updegrave, the couple should focus more on their retirement account than their mortgage. Why? The biggest reason is their age. "If you're investing this money for a very long period of time, I think it's a good bet that the returns to a mostly stock portfolio will beat the returns of a debt instrument such as a mortgage," he states.

He does mention that paying down the mortgage might be a good idea for those nearing or already in retirement. Their incomes are fixed or are growing at a slower rate.

Well, now I know I should focus more on my retirement than paying down my mortgage. What's the right choice for you?

SBA Bank Lending Comparisons

A recent post on the Delaware Business Blog led me to more research on the Small Business Administrations website. I uncovered a series of bank lending comparisons that is broken down by state. On the charts provided they illustrate the amount of lending activity each bank does in each state.

This kind of information is useful for small business owners in deciding where to seek financing and helps us to tell the difference between reality and marketing hype.

Monday, August 08, 2005

Class Warfare

The political opinion makers that are not far-right or far-left are increasingly seeing the political class as one of priviledge that feeds upon the liberties and activities of business and individuals.

The recent dust ups about redistricting (California), Federalism (Supreme Court) and the various smaller 'takings' of the Federal and State Legislatures have sparked a debate about revolution.

My favourite defenders of our liberty at the CATO INSTITUTE hosted a cybercolumn by Patrick Basham that hits several nails on the head.

If what he says is true, Democracy may already be dying in America. I see small business as a direct extension of liberty in America and so I am doubly worried. This is more proof that small business owners must pay attention to politics. They matter.

Census revises the "Survey of Business Owners"

The latest revision to the Census Office, "Survey of Business Owners" has been released.

While we feel the statistics reflect the same conclusions as the preliminary results reported by the SBA, they are now available in a fifty state breakdown.

Statistics for the United States.
Statistics for Delaware.

Big Green Jobs Machine

The U.S. Labor Department reports that 200,000 new jobs were created in the month of July. Our unemployment rate is very low right now too. So most of the people who want jobs, have jobs.

This is a great time for entrepreneurs. We find small business incorporations go up when things are very good (people can afford to leave jobs to strike out on their own) or when things are very bad (people without jobs are trying to make their own).

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Delaware Intercorp, Inc.
113 Barksdale Professional center
Newark, DE 19711-3258

"For all the best reasons to incorporate,the best place
is Delaware and the best incorporator is
Delaware Intercorp!"

Call Monday - Friday 09:00 (am) - 17:00 (pm) Eastern Time (GMT-05:00)

Toll Free - USA only - 888.324.1817
International: (1) 302.266.9367
FAX: 302.266.9940