RAA Group

By COLLEEN DEBAISE

Read an excerpt from THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press).

The economic downturn has dimmed many entrepreneurs’ hopes of opening a small business, as sources of funding have dwindled or dried up completely. And while many hope 2010 will be better, the outlook continues to be bleak.

The majority of entrepreneurs use personal savings or contributions from family or friends to fund their ventures, but personal wealth, often connected to the value of stock portfolios or homes, hasn’t bounced back.

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Kenneth MacKinnon

Kenneth MacKinnon, who wants to open a restaurant, networks with chefs on a fishing trip near Los Angeles.

Meanwhile, banks—under scrutiny by regulators—are continuing to strengthen capital reserves, making it difficult even for entrepreneurs with track records and years of experience to qualify for loans. And professional investors, stung by the financial meltdown, are meting out fewer capital infusions.

Kenneth MacKinnon moved to Los Angeles over two years ago with plans to start a tapas wine bar, but despite a high credit rating and collateral, including a home, the Scotland native says he has been unable to secure the $300,000 he needs from banks or private investors.

“The money supply has been shut off,” says Mr. MacKinnon, who had run a successful seafood eatery for 15 years in the U.K. that he sold in 2007 before moving to the U.S.

Funding from angel investors, or high-net-worth individuals who provide capital to young companies, fell 30% to $9.1 billion in the first half of 2009 compared with the same period a year earlier. That figure is expected to remain flat for 2010, according to Jeffrey Sohl, director of University of New Hampshire’s Center for Venture Research, which tracks the data.

Small Business Guidebook

• For More Workers, Home Is Where the Office Is

What is encouraging, Mr. Sohl says, is the number of deals has ticked up slightly. While angels are investing less—$370,000 per deal in 2009, versus $530,000 in 2008—about 24,500 ventures received funding during the first half of 2009, compared with 23,100 the year earlier.

“They are still doing the deals, but the deals are much cheaper now,” he says.

Venture capitalists, too, are continuing to invest, but typically in later-stage companies already in their portfolios rather than new prospects, says Mr. Sohl. The average deal size declined to $5.7 million in the first half of 2009, compared with $7.4 million to $7.8 million between 2005 and 2008.

As for Small Business Administration-guaranteed loans or conventional bank loans, the best thing about 2010 is that it won’t be 2009, says Bob Coleman, publisher of “The Coleman Report,” a La Canada, Calif., trade publication for SBA lenders. “We’re better off than where we were 12 months ago, but we are nowhere near where we were two years ago,” he says.

The SBA approved less than 45,000 loans for the 12 months ended Sept. 30, down 36% from a year earlier. Total volume for its flagship 7(a) loan was $9.3 billion, off year-ago levels by $3.4 billion.

Stimulus-related measures, however, contributed to an uptick in SBA lending in recent months. Mr. Coleman expects that trend to continue for 2010.

But SBA loans make up only about 1% of overall small-business lending, Mr. Coleman estimates. That figure may grow to 5% to 10% in 2010 as the government provides more incentives for financial institutions, especially community banks, to provide financing to small businesses, he says.

Still, getting the money may be a challenge. “Whether it’s an SBA loan or a conventional loan, you really have to be perceived as the ‘cream,’” Mr. Coleman says. Start-up entrepreneurs in particular will have to show they have a significant amount of their own savings in the venture, plus solid cash-flow projections, he says.

Maria Coyne, executive vice president and head of SBA lending at KeyBank in Clevand, agrees that start-up entrepreneurs will have to have a solid plan and assets. “They’ve got to get a good hunk of skin in the game, too,” she says.

Babson College in Wellesley, Mass., estimates that entrepreneurs need on average $65,000 to start a business, two-thirds of which comes from personal savings and the rest from “informal” investors such as relatives and friends.

Although the stock market is starting to recover, housing values remain weak. Two years ago, relatives were more willing to invest because “they might have seen they had a couple hundred thousand dollars in equity in their house,” says Babson entrepreneurship professor Andrew Zacharakis. “Today, that’s a scarier proposition.”

Lack of access to capital will also likely hamper entrepreneurs interested in buying a franchise, says Matt Shay, president of the International Franchise Association in Washington. The group estimates 2% growth in franchises for 2010 to over 901,000 establishments. That’s better than zero growth in 2009, but off the average 5.6% growth per year from 2001 to 2005.

In the past, potential franchisees could finance a purchase if they could put 15% to 20% down. Now, banks require large down payments of between 40% and 50%, Mr. Shay says.

Babson’s Prof. Zacharakis says he’s seeing companies doing more with less, including asking friends and family to work for free. “Instead of capital infusions, there might be a lot more exchanges of services or trading favors,” he says.

In Los Angeles, Mr. MacKinnon says he’s considering taking on partners so he can open his long-planned bar. Instead of starting from scratch, he might invest in a failed restaurant.

University of New Hampshire’s Mr. Sohl says he believes “we’re done with the downdraft,” though he remains cautious for 2010. “People aren’t ready to bet the farm,” he says.

Write to Colleen DeBaise at colleen.debaise@wsj.com

If you have taken a blogging course with me, then you already received an email from me with this information.  However, it’s such an important issue that I want to share it here with everyone.

It was recently brought to my attention that WordPress.com is now outright banning MLM blogs, referring to them as “affiliate marketing” and “pyramid schemes.”  While I disagree with this assessment, and have alerted the DSA who is looking into the issue, it is important that you be aware of this, so that you don’t get your blog shut down.

In my own correspondence with WordPress about the issue, here is their clarification:

“Any kind of MLM blogs – or blogs created to direct readers to external domains for commercial purposes – are not permitted at WordPress.com. If you are creating the blog to make money, WordPress.com is not the place for you.”

However in WordPress’s rules, they do allow business blogs to demonstrate expertise:

“Business: Professionals ranging from realtors to lawyers and stock brokers are using WordPress to share their expertise, and companies have discovered the power of blogs to more directly and personally engage with their customers.”

When I followed up with them asking about this, here is what they said:

Jennifer: “If legitimate direct sellers are only using their blog to demonstrate their expertise, wouldn’t that fall under those rules?”

WordPress: “Yes, but if the direct seller is continually linking back to their own domain to sell things, they will not be allowed. If the blog is purely information (with no intent to direct users elsewhere to buy things), that is perfectly okay.”

You can read all the rules here: http://en.wordpress.com/types-of-blogs/

If you follow the strategy laid out in my courses and teachings, you SHOULD be OK.  You should not be highlighting specific products or opportunity, but instead should be giving practical, actionable content that people can use right now without spending a dime.  However you will NOT be allowed to include a link to your personal website based on WordPress’ interpretation of the rules.  Instead, you should have a place for people to sign up for your newsletter, and you can share the link to your website there.  Be aware, however, that WordPress.com will shut you down without notice if they decide your blog is in violation of their rules.

Please note that this does not apply to you if you are hosting your blog on your own domain.  However if you are using the free WordPress.com service, it is important to make sure you are in compliance.

If you have any questions, please don’t hesitate to email WordPress directly at support@wordpress.com.

What do you think about these rules?  Do you think the actions of a few “bad apples” is messing it up for the rest of us?  Is it fair?  Would love to read your thoughts below.

Twenty-five percent of homes listed for sale in Miami have had their prices reduced at least once between June and December, according to Trulia. The national figure is 22 percent.

The San Francisco-based real estate Web site found the average price reduction in Miami was 15 percent, while the national figure was 11 percent, up slightly from 10 percent in the previous quarter.

Statewide, 23 percent of listings had price reductions in the last quarter, with an average reduction of 13 percent, or $53,591.

Nationwide, total listings fell 9 percent in December from the previous month, with the total amount slashed from home prices falling to $24.7 billion in December from $28.1 billion in November.

“The tax credit extension has provided sellers with a much bigger window of opportunity, creating significantly less pressure to sell now,” Trulia co-founder and CEO Pete Flint said in a news release. “With economic indicators showing positive signs during the past couple months, many sellers will be poised to wait to sell. They want to sell at the highest price possible and, as inventory levels are seeing a 9 percent decrease from the previous month, there will be less competition amongst sellers, leading to less price reductions in the near term.”

Cities that have experienced significant increases in percentage of listings with price reductions in the third quarter include:

• Kansas City, Mo. – 40%
• Omaha, Neb. – 39%
• Houston – 32%
• Minneapolis – 29%
• Arlington, Va. – 28%

Cities with the highest percentage of declines for listings with price reductions between June and November include:

• Las Vegas – 30%
• San Jose, Calif. – 30%
• Long Beach, Calif. – 25%
• Honolulu – 23%
• Albuquerque, N.M. – 22%

The U.S. Census Bureau reports that state governments took in nearly $1.7 trillion in total revenue in fiscal year 2008, a 15.8 percent decrease from 2007.

The largest share of the state revenue came from taxes ($780.7 billion), which made up 46.5 percent of the total. The Census Bureau said the decline was primarily because of a decrease in insurance trust revenue, which fell by $377.7 billion (72.7 percent).

Insurance trust systems include public employee retirement systems, the unemployment compensation system, state government workers’ compensation programs and other state social insurance trusts.

Florida’s total revenue was $69.2 billion last year, of which $35.8 billion came from taxes. Total expenditures were $76.9 billion, up from $72.7 billion in 2007. By function, the biggest chunk came from education, at $23.1 billion, followed by welfare, which totaled $18.06 billion, up from with $17.3 billion in 2007. Welfare expenditures comprised 23.5 percent of the state’s total expenditures in 2008.

Other findings:

• Total state government expenditures increased 6.2 percent from fiscal year 2007, totaling $1.7 trillion in 2008. Education ($546.8 billion), public welfare ($412.1 billion) and highways ($107.2 billion) represented the top three outlays, accounting for nearly two-thirds of all state government total expenditures.
• Eleven states spent more than 25 percent of total expenditures on public welfare, with Tennessee (32.8 percent), Maine (30.5 percent) and Rhode Island (29.8 percent) spending the highest percentage of their total expenditures.
• Public welfare spending, used to support people based on need, includes such items as old-age assistance, temporary assistance for needy families, and commodities and services provided under welfare programs, including medical care or burial services.
• Hawaii (11.5 percent), Alabama (10.1 percent) and South Carolina (9.9 percent) led in spending on public health and hospitals as a percentage of total expenditures.

The findings come from the 2008 Annual Survey of State Government Finances, which includes data on revenue, expenditures, debt, and cash and security holdings for each state, as well as a national level summary.

Click here to access the report.

South Florida ranks among the five markets in the country with the biggest home value losses – down $45.9 billion in 2009, according to the latest statistics from Zillow.

Still, that’s better than the $137.2 billion in value lost in 2008.

The improvement also is reflected on the national level, where U.S. homes lost $489 billion in value during the first 11 months of the year, significantly less than the $3.6 trillion that was lost in 2008.

Forty-eight of the 154 markets tracked by Zillow showed gains in home values this year, with the Boston metropolitan statistical area showing the largest gain, at $23.3 billion. The Providence, R.I., MSA was second, with a $12.4 billion gain.

Fewer single-family homeowners also were underwater in the third quarter – 21 percent, down from 23 percent in the second quarter, according to Zillow.

“Most housing markets across the country had a good summer, spurred largely by the government’s tax credits for homebuyers combined with very low mortgage rates,” said Stan Humphries, Zillow’s chief economist, in a news release.

However, he noted that demand is expected to drop as mortgage rates creep back up, and the number of foreclosures remains high.

On Tuesday, Condo Vultures reported that there were 7,000 foreclosures last month in the tri-county area.

December 1, 2009

The United States PV Market: Project Economics, Policy, Demand, and Strategy Through 2013

Demand for PV projects in the United States is rapidly expanding as a result of falling system prices, stimulus funding and new regulatory incentives. As the recession retreats, the U.S. is poised to become the largest global demand center for PV. Anticipating this trend, global solar market players from all parts of the value chain are seeking strategies to gain access to U.S. PV demand. Simultaneously, the market itself is evolving as utility-scale projects gain steam and innovations in project financing emerge.

However, the U.S. does not offer a singular demand market for PV. Rather, it is an amalgamation of 50 states, each of which has a unique set of incentives, regulations, electricity prices and political processes. Even within most states, these factors differ according to electric utility service territory and/or municipality. These factors ultimately impact PV demand and project economics differently based on project size, market segment, and end customer. Developing a downstream U.S. PV market strategy requires a deliberate, highly specified approach to each application, state market and market segment.

This report stands alone as the only analysis to provide the full range of tools necessary to develop a strategy to address each market. In addition to considering national trends in project financing, incentives and demand dynamics, it analyzes the 16 key state markets individually, accounting for each state’s unique incentive structure, solar availability, historical market size, barriers to adoption and electricity prices. It projects demand by market segment within each state, and uses these projections to develop a bottom-up forecast for the entire nation by state and by market segment. Finally, it contains competitive analysis of the project developers, integrators, and financiers that comprise today’s market, and the characteristics they will need in order to thrive as the market expands.

IN THIS REPORT:

• Demand projections by market segment for sixteen primary state markets, together comprising over 97 percent of national demand
• Analysis of demand drivers, incentive value, and subsidized grid parity for each market segment in each state
• National bottom-up demand forecast by state and market segment
• Competitive analysis of market players and development strategies
• Comprehensive listing of incentives and regulations that impact the PV market, including the American Recovery and Reinvestment Act of 2009 (the stimulus package) and the potential for federal cap-and-trade
• Analysis of trends in project financing and comparison of financing structures
• Profiles of 31 residential, commercial and utility-scale project developers with U.S. operations

KEY FINDINGS:

U.S. PV Demand Grows in 2009 Despite the Recession: Grid-connected PV demand will reach 440 MW in 2009, up from 320 MW in 2008. In an upside economic scenario, demand could reach 544 MW in 2009. The residential sector and local/state government projects drive demand growth, thanks to stimulus funding and the recently uncapped residential Investment Tax Credit. California retains its dominant market share, accounting for 205 MW in the base case scenario, or 50 percent of national demand. Secondary markets in Arizona, Colorado and New Jersey support demand growth.

U.S. PV Market Becomes Global Demand Leader by 2012: Over the next four years, the U.S. will experience the most rapid demand growth of any major PV market. Base case U.S. PV demand grows to 1,515 MW in 2012, with annual growth from 2008 to 2012 averaging 48 percent. The upside scenario sees demand reaching 2,022 MW in 2012. During this period, the U.S. surpasses Spain, and potentially Germany, to become the leading global PV market.

Secondary Demand Markets Gain Increasing Importance: Although California’s market share remains relatively steady at around 50 percent of national capacity second-tier markets gain increasing value as their absolute size increases. By 2012, combined base case demand from leading secondary states Arizona, New Jersey, New Mexico, New York, Nevada and Massachusetts reaches 376 MW.

Price Convergence Between PV and Grid Electricity Already Reached in High-Demand Locations, 11 States to Follow by 2012: We model projects in 16 states to determine when post-incentive PV generation costs and grid electricity will converge. Each state offers an incentive package that favors some market segments over others. Price convergence in these markets is heavily sector-dependent. States with high levels of demand, such as New Jersey and California, have already experienced price convergence in particular market segments, while others stand on the precipice. By 2012, 11 of 16 states will have surpassed price convergence in the commercial sector, and ten will have done so in the residential sector.

New Financing Models Drive Residential Sector Growth: Financing models that obviate the need for direct ownership will drive residential market growth. Though we predict residential price convergence in a number of states, we maintain that up-front cost and simple payback are the two factors gating demand for residential projects. The expansion of residential solar financing through leases or power purchases agreements with little up-front cost will enable the residential sector to grow to 363 MW by 2012 in the base case.

Utility-Scale Demand Gains Market Share Through 2012: Utility-scale installations will be the fastest growing market segment, stealing market share from the commercial sector and reaching 466 MW in the 2012 regulatory scenario. This is a result partly of RPS requirements and a wave of new solar-specific RFPs in states with solar carve-outs. It is also a result of heightened interest in utility ownership of PV, for which there are numerous economic and operational benefits for utilities.

Successful Project Developers Build Adaptation Into Their Market Strategy: Unlike Germany, Spain or Japan, the U.S. is comprised of 50 differentiable PV markets. With changes occurring both over time and by location, addressable markets are in a constant state of flux. Successful project developers will build adaptation into their market strategy, rather than seeking to minimize its necessity. By doing so, they will turn the complexity of the U.S. market into an advantage, rather than a limitation.

Florida dealmakers said merger and acquisition activity is all but dead this year, but an Association for Corporate Growth/Thompson Reuters poll found 71 percent expect the market to pick up in 2010.

Ninety-five percent of dealmakers polled characterized the current M&A market as fair or poor, but 71 percent said they expect activity to increase next year.

The dealmakers said it remains a buyers’ market for strategic investors. They identified the hottest areas for mergers: health care and life sciences (22 percent), financial services (19 percent) and business services (19 percent).

The survey is conducted twice each year. The most recent poll, undertaken in October and November, was completed by 921 association members and Thompson Reuters customers, including 38 in Florida.

Click here to read more.

The Internet of Things is fast approaching and with it comes Web 3.0, where “social awareness” will replace “social networking.” Soon tweets and status updates will become fully automated and generated by the world around us versus us ever having to touch a keyboard again.

Ambient intelligence systems are being developed with sensors and smart objects that will instantaneously create awareness about our whereabouts. This data will then be shared with our social networking and messaging platforms. Our friends and followers on Facebook and Twitter will be alerted automatically without us ever having to manually tweet or post a status update.

Achilles KameasAchilles Kameas, a senior researcher at the Research Academic Computer Technology Institute (raCTI) of Patras, Greece coordinated the EU-funded ASTRA project which brought together researchers from multiple disciplines, including psychology, interaction design, knowledge engineering and computer science. Their mission is to take social networking to the next level.

Internet of ThingsIn my past blogs, I have written about the Internet of Things and Semantic

Technology where Web 3.0 will eventually no longer need the input of humans, because all the content warehoused from the Web 2.0 era will be able to data-mined by machines and use when needed .

Users of a social networking platform based on the ASTRA approach would no longer need to post status updates manually to let their family know what they are doing or where they are. Surrounded by smart objects and sensors in their home or office, the system will continually update their status information, automatically telling friends that they are unavailable to receive a phone call while they are busy cooking

or that they do not want to be disturbed during a business meeting.

This video gives you a glimpse of the future which is just around the corner. The ASTRA project examines “social awareness” and how it extends the primary tenets of social networking that addresses our need to stay in touch with family and friends or to be reassured regarding our own well-being.

According to Kameas, creating mobile apps is the next step in the “social awareness” process and consumer electronics manufacturer Phillips and mobile operator Telenor are presently conducted trials of the ASTRA technology.  So soon there’ll be an app for that!

The response of test users, Kameas says, “has been generally positive, although many have raised concerns about privacy and security issues.” In that regard, the Kameas notes that the system is similar to Facebook and other online services in that users can choose how much information they share and with whom.

The researchers developed their approach based on the so-called focus-nimbus model to determine what information is shared and what is received by different people in a social network. A Psych Central report states that “in this context, a person’s nimbus consists of the type, amount and detail of information they want to share with others, while their focus contains the type and amount of information they choose to receive from others, including their reaction to the person’s nimbus.”

In an ITC Results report, Kameas notes, “it’s like a window. You can leave it wide open, pull the curtain, or close the blinds. Then, what you choose to put on display in the window, be it content or an activity, can be seen by others.”

So the future is here, my friends. As long as it took us to get to Web 2.0, like everything else in life, we will soon be seeing it fade into our rear-view mirrors. It will be interesting however to see whether Twitter, Facebook and the other social networks transition into this brave new world, or whether they’ll be stuck in a time warp, unable to adapt to the change!

See you on the other side!

Ron Callari
Society and Trends Writer
InventorSpot.com

Mobile location-based social networking is expected to become a key driver for the uptake of location-based services as it provides a unifying framework for a large set of applications such as friend finders, local search and geo-tagging. While many LBS applications will include features allowing the sharing of real-time experiences via fixed social networking sites such as Facebook and MySpace, fully-fledged mobile location-based social networking sites will also gain momentum with more than 82 million subscriptions expected by 2013.

“While growth will be mainly driven by the availability of multimedia-centric GPS handsets, other mobile form factors will also become important”, says ABI Research director Dominique Bonte. “Mobile Internet Devices (MIDs) with built-in GPS receivers have been announced, with location-based social networking site GyPSii supporting Moblin-based Intel Atom processor-powered MIDs. Connected PNDs and outdoor GPS solutions are other obvious candidates for location-based networking. Nissan Carwings’ in-car telematics solution allows the sharing and ranking of fuel consumption in Japan.”

Licensing agreements with carriers and handsets manufacturers will be a crucial success factor for location-enabled social sites to reach critical market share. While initially a wide range of business models will coexist, ultimately advertising-based models will prevail due to the perfect fit with the local search- and content-driven social context.

Another important trend is the emergence of location-enabled instant messaging with applications such as Palringo Local and Nokia Chat enriching mobile communication with location context.

ABI Research’s study Location-Based Mobile Social Networking offers insight into trends, social networking features, drivers, barriers and includes detailed descriptions of solutions and market players, with special focus on business models. It also provides recommendations to all major players and shipment and revenue forecasts per region and per location-based social networking type. It forms part of the Location Aware Services, Consumer Mobility and Mobile Content Research Services.

ABI Research is a leading market research firm focused on the impact of emerging technologies on global consumer and business markets. Utilizing a unique blend of market intelligence, primary research, and expert assessment from its worldwide team of industry analysts, ABI Research assists hundreds of clients each year with their strategic growth initiatives. For information, visit www.abiresearch.com, or call +1.516.624.2500.