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"One of my favorite hobbies is smashing stereotypes. And one of the most egregious sets of stereotypes around, from my perspective, are the stereotypes about microbusinesses -- specifically, the stereotypes that arise because people make assumptions about what microbusinesses can and cannot do, based on their size.

For example, while it is true that most microbusinesses make relatively little in annual average revenues, it is not true that all microbusinesses make relatively little nor is it true that those that do make relatively little do so because they are microbusinesses.

That's why it makes me particularly happy when I come across a company like the Valorem Corporation.

The Valorem Corporation is a veteran-owned, Laurel, MD (USA)-based firm, and is young enough that owner Kyle Haycock couldn't even make a guess at its average annual revenues. It was just incorporated this past March, and Haycock has just hired three new full-time employees.

He needed to do that because he has just landed a six-month contract with the Department of Defense, worth half a million dollars.

So much for what microbusinesses can't do.

Valorem is in the business of supplying linguists and intelligence analysts to the federal government. It is a line of work that Haycock is very familiar with because he has been doing it for the past decade. In fact, that is pretty much what gave him the idea to start this business. According to Haycock, Valorem was formed specifically to be a government contractor.

That means that his business is not likely to stay micro. But it also does not mean that he has to wait until his business "grows up" before he sets out to do what he set out to do.

* * *

Even with all the advantages of being well-versed in the needs of his prospective customer, having all kinds of contacts among the procurement officers he needed to deal with, and a very respectable record of past performance working under other circumstances but performing the same services, he still had three-fourths of a year of administrative tap-dancing to deal with.

Valorem, unlike most microbusinesses, was formed and designed strictly to serve the federal government. For a microbusiness owner who may want to sell to the government but who may also want to do something else, the kind of single-minded tenacity displayed by Haycock can only come at the expense of other business. And, for most microbusinesses, losing current customers because of that single-minded pursuit when you don't even know that you'll win the contract is a seemingly insurmountable obstacle to federal contracting."

"Over the past decade, virtually every traditionally disadvantaged group made gains in absolute terms. Take, for example, families headed by immigrants who entered the country in the 1980s. The poverty rate for such families dropped sharply, from 26.6% in 1995 to 16.4% in 2003, the latest numbers available. Similarly, a combination of welfare reform and tight labor markets helped drive down the poverty rate for female-headed households with children from 46.1% in 1993 to 35.5% in 2003. That may not seem like much, but it beats the total lack of progress in the previous decade. And a new book, Moving Up or Moving On: Who Advances in the Low-Wage Labor Market?, uses a new set of data to look at the wage history of a group of low-earning workers from 1993 to 2001. Adjusted for inflation, those people saw their average earnings more than double over those nine years."

"My main goal with the blog is to gain key phrases and report to e-marketeters how I did it. I decided to start a blog to research how blogs are spidered and catalogued by search engines."

"As an experiment, I submitted my posts to a place called 'My Best Posts' through a web site at Zealous.org. I spent a good chunk of time submitting my posts to drive extra traffic to the blog. I subsequently logged in to add another post. Much to my dismay, my posts were all gone! They deleted all my posts and would only say that my posts -- all of a sudden -- didn't fit in with their goals. So now, rather than reporting that this site is a good resource to help you get the word out about your blog, I'm recommending you stay from using them because there's no guarantee your own hard work won't suddenly disappear with no notice, just as mine did!"

"In 2002, John Wieber started worrying about his business, which sold refurbished computers through Internet auctioneer eBay Inc. Although he was earning $1 million a year in revenue, profits had started to slip as competitors flocked to the site. EBay also raised its fees, further cutting margins, and fraud was becoming a problem.

So Mr. Wieber revamped his Web site and began selling through other online companies, such as Amazon.com Inc. and Yahoo Inc. Last year, his sales neared $5 million, but his eBay revenue grew at a much slower pace, making up only a quarter of the total. It will likely fall still lower. Of the auction site, where he got his start, Mr. Wieber says: 'Too many sellers, not enough buyers.'"

"The personal computer for the rest of the world isn't going to be the personal computer. It's going to be the cellphone," says John Sviokla, 47, the vice chairman of DiamondCluster International, a Chicago-based technology-consulting company. "Communication is more important than computation on the human hierarchy of need."

But before that can happen, the cellphone is going to have to change. Specifically, cellphone companies have to surrender their control over the phone's features and capabilities. If phones had standard ports -- such as USB connections -- innovators could develop their own applications without having to wait for the cellular provider to offer them.

"Think of what happened with personal computers when they opened up the architecture," Dr. Sviokla says. "Personal innovation flourished."

So what would he add if he could? He lists a scanner that would enable him to store business-card information in the phone, a global-positioning system, a radar detector, a flash-memory reader that would allow the phone to serve as a portable hard drive and a fingerprint reader "so I could lock my phone by touching it and unlock it by touching it," Dr. Sviokla says, noting that several vendors provide the technology, but it isn't available on any phones on the market.

"The phone companies cannot possibly market all the options that people might come up with," Mr. Sviokla says. "If they open the device, then the market of new adopters can discover the most popular combinations, and then the big guys can pick the popular things and merchandise them extensively."

"On the other hand, in the U.S. there has been a 20% drop in participation in the entrepreneurial process -- as defined for the TEA index -- in one year. Given that the peak in the year 2000 may have been an aberration, a reflection of entrepreneurial "irrational exuberance," this decline may not be a major cause for concern. Entrepreneurial participation rates are still more than twice what they were in the early 1990s. It would seem wide to carefully follow developments in the participation in entrepreneurship -- perhaps continuously or at six-month intervals -- to determine if this decline continues."

• Corporate buyers are relying more on acquisitions for growth.



• Financing is readily available. "Lenders galore."



• The transportation business is doing well -- the best in 20 years.



• Large price differences exist between high-tech manufacturers with proprietary technology (high prices), and ordinary manufacturers (lower multiples).

"About 10 miles into running the Boston Marathon, I wanted to quit. Fortunately, I met a woman who offered encouragement by telling me that even if you walk to the finish line you're still going to finish. I walked/ran with her for a mile or two. Then I caught up to another person who helped me go farther. I got my 'second wind' and finished the marathon. I didn't know either of these people, but they were kind enough to help a stranger."

"Many times we want to quit. We make a comment to someone, and it turns out that person helps us see through the problem, the challenge, and we make it to the finish line. So if you find someone who's contemplating throwing in the towel, help them out with some encouraging words."

The Small Business Optimism Index rose one point in May to 100.8 (1986 = 100). The May reading reverses a five month decline in the Index from its record high reading of 107.7 in November 2004. Job creation plans and positive earnings trends accounted for the bulk of the improvement. An Index reading of 100 translates to a 1986 economy, the base year for the Index (1986=100). Nineteen eighty-six was a good year when real GDP grew 3.5 percent and inflation was three percent (GDP deflator). In 2005, first quarter GDP grew 3.5 percent. The economy is one-quarter of the way to a 1986 repeat. Trade will produce more risk to GDP growth than it did in 1986, but spending on both foreign and domestic goods and services will be strong.

1. Pay Per Call Rings In: Pay per click used to be the height of technology, but in the near future expect pay-per-call to kick in, with clicks transforming into telephone calls to the advertiser.

2. Feed Marketing Flourishes: Expect to see ads in RSS feeds, podcast feeds and even in video feeds.

3. Email Marketing Will Survive: "Sp@m issues will recede dramatically, because they have to. Too much is at stake."

4. Agent, Personal Agent: "Watch for the growth of "agent software" to help you sift through the morass of online information. There's too much relevant stuff for mere humans to sift through now."

5. Reverb Marketing, In Stereo: "eMarketer points out that many Internet users already use multiple forms of media at once. Even as I write this I'm listening to CNBC in the background. Smart marketers will synchronize their messaging so the end user hears and sees complementary messages at or near the same time."

6. Blogs Go Multimedia: Blogs will start to offer content in audio and in video, not just text.

7. TVIP Adds Interactivity: Expect to see TV over the Internet (we already have it in pockets here and there). However, this kind of TV will be different from what we are used to, without as many ads and with more interactivity.

8. Commercial Content, On Demand: Marketing messages and ads will need to become so appealing that consumers actually want them. The old-style push marketing messages just are not working.

9. Publishing Faces Tectonic Shifts: Publishers will have to adjust their business models, perhaps by offering more free content online or special editions for online versus print.

10. Direct Marketers Will Take Over the Internet: This has already happened, although the tools are different. However, the laws of human nature that drive direct marketing have remained the same since Ben Franklin's time.

11. Internet-Free Zones Become the Hot New Trend (bonus tip): With the Internet becoming ubiquitous, expect to see travel packages with "Internet-free zones" as consumers try desperately to get away from it all.

Paul D. Reynolds, Paul T. Babson Professor in Entrepreneurial Studies at Babson College, in Wellesley, Mass., points out that the information we have doesn't allow us to make easy comparisons. "The best we can say is that most industrialized nations have comparable rates of entrepreneurial activity," he says, adding that regional variations within countries are much more dramatic than variations among countries. (Inc.com/magazine, May 1996.)

The importance of the entrepreneur is also evident in recent comments from the National Federation of Independent Businesses, which represents small companies. NFIB's surveys of its 600,000 members indicate job creation among small businesses is "much more consistent with the household survey than the payroll survey." Corroborating that, the personal income created from proprietorships is growing at an annual rate of 10.5% so far this year, up from a 9.2% pace for all of last year and twice the pace of income from wages and salaries. (BusinessWeek.com/magazine, 06/20/05.)

"AllBusiness has a number of professionals blogging on the topics of their expertise and sharing their ideas and experiences with other professionals. With these blogs at our site, we provide resources to help small and growing businesses start, manage, finance and expand their business."

"Each blogger gets his or her own blog and can build their own community around their topic. We make it easy and convenient for our bloggers because we support them with back-end management, marketing, traffic and other resources."

"A new breed of entrepreneurs whose main objectives are to keep their business small and enjoy life are shedding the 'enterprise culture' tag thrust upon them by Government initiatives.

Far from being the next Richard Branson, the overwhelming majority of entrepreneurs simply want "an alternative to the nine to five of a traditional job" that lets them "retain control over their lives."

These are the 'alterpreneurs' -- self employed people that "work to live" so they can obtain "freedom from the corporate treadmill and the chance to build their own lifestyle."

• A revolution is taking place, providing opportunities for independent musicians, filmmakers and writers to make money from niche products. Many are simply choosing to distribute their works on their own, and bypass major studios and publishing houses.



• As an example of how important niches have become, 57% of Amazon.com's book revenues are from books not available on traditional bookshelves.



• Artists are saying "Who needs audiences of millions?" Without the marketing burdens and the huge overhead of trying to reach mass markets, artists find they can be successful and make a profit with fewer customers.



• This shift is giving rise to completely new distribution methods and new kinds of websites that sell the output of independent musicians and writers. Examples include CD Baby, ArtistShare and Magnatune.



• The film industry also is in the early stages of change. In the U.S. 1,400 independent movies were produced last year. In India 800 movies were produced last year. Today, technology allows nearly anyone to produce professional-looking final product, not just the large studios. Soon we will have central clearinghouse sites for film downloads, just as we have central distribution for books through Amazon and for music through music sites like iTunes.



• Robin also took a few moments to talk about one of his latest projects, TheWeblogProject. He calls it an "open source movie' meaning that anyone can contribute to it. The film is about blogs. Robin is accepting video and other contributions for this project.

Dear Anita,

There are more resources available to start-ups. Here are some of the ones we help our clients access.


• Count-me-in, an online microlender for women.



• SBA Community Express loans, available through Innovative Bank and local business organizations (such as ours).



• Community lenders. Check the SBA site, click on your state, then click on financing.



• State governments often have financing programs - check with the economic development units at the city, county and state levels to find out what incentives may be available for your type of business.



• Network in small business and economic development circles.



• Also, note that getting a bank loan is a process that you can get help with. Locate a convenient Small Business Development Center or Women's Business Center and meet with their counselors. These organizations have relationships with local banks and can help you find the right lender. They also provide the kind of business planning counseling and courses -- often delivered by lenders -- that leads, eventually, to successful loans. (We have a number of success stories.) They also teach the process of developing a relationship with the right bank so that, over time, you position yourself for a successful loan application.


Interestingly, a high proportion of potential business loan applicants have credit problems. Anyone who anticipates needing business financing should first learn their credit score and raise their credit rating.

I hope you will be able to share this information with your readers. Thanks so much!

Kind regards,

Susan M. Kuhn
Vice President, Entrepreneurial Programs
National Women's Business Center

1. Email: Because it changed the way small businesses communicate in business

2. Google: Because it changed the way small businesses advertise

3. eBay: Because it introduced online auction sites where small businesses can now buy and sell for their businesses

4. Amazon.com: Because it introduced small business to e-commerce

5. Online networking (such as LinkedIn.com): Because it enables business owners to share ideas and find business partners all over the country

"It's the era of the blog on the World Wide Web. In fact, there are so many of them, it's nearly impossible to find the best blogs on your own. Ken Leebow tries to do that with his site at www.incredibleblogs.com. He links to blog journals dealing with anything and everything. If you want to know where you might find the best blogs on the Web, or what makes a good blog, this is the place to start."

"Since I've been in the technology world for more than 25 years," he explains, "I simplify technology for the general public. I review technology and trends and assess their long-term visibility. I take out the hype -- and there's lots with blogs -- and report the real meat to my readers. My main goal now is to be a blog expert and simplify blogging for the uninitiated, and also provide some information for experienced bloggers."

• What is a blog?


• What can it do for me?


• How can I start one?


• Will it really help my business?

"We find there is more interest than ever in buying and selling businesses in the small-to-midsize-business market. From my perspective things are hot. According to a recent article in Fortune magazine 3.5 million people between the ages of 40-58 lost their jobs between 2001-2004. Ouch. Five percent of the baby boom population... a lot of them have money and can "buy their next job." Additionally, baby boomers who own businesses are rapidly approaching retirement. I think these are two key drivers of ownership transfer activity."

• Biz Buy Sell


• Biz For Sell


• Busimarket


• Business Broker Network


• International Business Broker's Association


• Merger Network

"NARROW-CASTING." Part of the boom derives from an old phenomenon: What entrepreneur wouldn't love to see his or her name as editor or publisher emblazoned on the inside cover of a magazine? And now, the barrier to entry, at least from a technology standpoint, has never been lower, with sophisticated publishing software and high-speed Internet connections commonplace.

Combine that with Americans' greater discretionary income to spend on leisure, which allows them to more fully cultivate interests, from cooking to coin collecting, and you have a trend. "I call this phenomenon narrow-casting, where people want to know more about just one subject, and they either flip to a TV channel that offers that information or pick the magazine that does," Husni says. "I mean, you have tons of new magazines on fishing, a magazine for landscaping, even furniture painting -- you name it, and we've got a magazine for it."

Last year saw the launch of 125 new magazines on crafts and hobbies, 83 on specific geographic regions, 59 on home design and services, 57 on sports, and 41 on different types of cars. The latest craze: "There have been eight poker magazines launched in just the past six months," Smith says.

"The Space Alliance Technology Outreach Program (SATOP) strives to transfer the knowledge and technology of the space program to small businesses. Any type of small business is encouraged to submit a technical challenge to SATOP. If SATOP is able to assist, the small business is provided with up to 40 hours of FREE technical assistance from a scientist or engineer in the Space Program."