Microenterprise Success

The decline and fall of business ethics

Did we learn anything from the profit-at-any-price malaise that infected so many financiers during the 1980s?

Editor’s Note: Every week, Fortune.com publishes favorite stories from the Fortune magazine archives. This one was published in the December 8, 1986 issue — after Ivan Boesky’s fall but before Michael Milken’s indictment. It was the leveraged buyout heyday, when no one on Wall Street could be trusted. Today, with the hedge fund manager Raj Rajaratnam fighting insider trading charges in a Manhattan courtroom and one of Warren Buffett’s top executives, David Sokol, resigning under suspicions about his personal trades, the lessons from the 1980s still ring true. What makes seemingly smart businesspeople lose all sense of ethics in a fleeting moment? Myron Magnet speculates: “[W]hat pushes some insider traders over the line, beyond mere greed, is a more primitive wish to flirt with danger.”

By Myron Magnet

WHAT IS THIS — the business news or the crime report? Turn over one stone and out crawls Ivan Boesky’s tipster, investment banker Dennis Levine, dirt clinging to his $12.6-million insider-trading profits. Turn over another and there’s a wriggling tangle of the same slimy creatures, from minute grubs like the Yuppie Gang to plump granddads like jailed former Deputy Defense Secretary Paul Thayer. A shovel plunged into the ground above General Electric (GE) recently disclosed a bustling colony industriously faking time sheets to overcharge the government on defense contracts. Almost everywhere you look in the business world today, from the E.F. Hutton check-kiting scheme to the Bank of Boston money-laundering scandal, you glimpse something loathsome scuttling away out of the corner of your eye.

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AMD revises contracts to lower it’s chip manufacturing costs

by microent

Advanced Micro Devices said Sunday it has revised the contract with its major chip contract manufacturer, Globalfoundries, so that it can pay a predictable amount for its silicon wafers.

Having a stable source of silicon wafers is important for AMD, which designs microprocessors that serve as the brains in about 20 percent of the world’s personal computers. Better prices for chip wafers can make AMD more competitive against its arch rival, Intel, which has far more resources.

AMD spun off Globalfoundries, which manufactures the chips AMD designs, in 2009, but it retained an equity stake in the company.

Based on the revised deal, AMD will record a non-cash gain of $492 million based on the change in value of AMD’s investment in Globalfoundries. Separately, AMD will now change the way it pays for the finished silicon wafers it receives from Globalfoundries. In 2011, AMD will pay only for the good, working 32-nanometer chips it receives from Globalfoundries.

AMD currently estimates that it will pay Globalfoundries $1.1 – $1.5 billion in 2011 and $1.5 -$1.9 billion in 2012 for wafer purchases under the amended agreement. (Wafers are processed in factories and then sliced into individual chips that are used inside computers).

AMD will also pay a fixed pre-agreed price for 45 nanometer wafers from Globalfoundries. In the past, AMD’s 45 nanometer prices were tied to a cost-plus model and included the fixed cost of underutilized factories at Globalfoundries. That was a relatively high price to pay. In 2012, AMD will resume paying Globalfoundries on a cost-plus basis for its microprocessors and combo chips. AMD has committed to paying for a higher number of chips than it had previously agreed to buy.

How to Start Yoga Business

by microent

<strong>Vrks?sana:</strong> Also know as the Tree Pose, this position emphasizes alignment of the head, spine and hips.

Have you considered starting a yoga business of your own? It takes hard work and dedication, just like the practice of yoga itself.

Yoga is an ancient Hindu philosophical practice that combines body movement and fixed postures with meditation, spiritual, and holistic exercises. In recent years, many enlightenment seekers have jumped on the yoga bandwagon, lured in by donation-only sessions, and inexpensive one-off classes. There is even the Gawker-esque blog YogaDork, profiled in kind by The New York Times, that covers the frivolous nuances of the increasingly trendy $5.7 billion industry.

Don’t be fooled by its whimsical exterior – the business of yoga comes equipped with the joys and pitfalls of any other business. Before you make that career change, read on to discover he best ways to go about founding a prolific and profitable practice.

How to Start a Yoga Business: Yoga Certification

Your first step should to obtain certification as an instructor from a Yoga Alliance affiliated institution. Yoga Alliance is the organization that presides over the national standards when it comes to yoga and, although it is not mandatory that a teacher or a school be certified, it is the industry standard. Yoga Alliance lists the certification requirements for individuals and institutions on its Web site.

For an individual to be certified, Yoga Alliance requires a one-time $25 application fee, along with a $55 annual fee. If you desire to instruct teacher trainings at your school, a Registered Yoga School (RYS) certification is required to conduct 200-hour level teacher trainings. This registration requires a one-time $350 application fee and a $200 annual renewal fee.

Why Wisconsin’s ham-handed crusade against wind power blows

by microent

Regulatory snafus have halted the production of two wind farms in Wisconsin that would have generated more than 98 megawatts of power from a renewable energy source. It’s an unnecessary jab against the wind power industry, which has been viewed as one of the most attractive options for renewable energy — and it’s for all the wrong reasons.

Wisconsin legislators are arguing that current laws that dictate how far a wind turbine can be placed from someone’s property are not strict enough — that companies can place them too close to the homes of everyday citizens. The legislators argue that the turbines will affect local property and home sale values because they are an eyesore. They are also arguing that there is a chance of injury in having a massive piece of machinery nearby — though they don’t specify how they can cause injury.

The claim that planting wind farms near a home can decrease its sale value is completely bogus. The reasons for trying to alter the regulations and force wind companies to build wind farms further from homes are not well-supported and are an unnecessary obstacle to the progress of wind energy. Any change in regulations after a turbine is built could prove to be disastrous. The injury argument makes sense — but that’s because a massive machine with many moving parts of any kind nearby can be a hazard. This comes after another company dropped plans to build wind energy farms in an area in Wisconsin over concerns about the regulatory environment.

But a study initiated by the U.S. Department of Energy in 2009 debunked the claim that wind turbines would have a meaningful impact on local property values. The report indicated that — while there was a chance that individual homes would be impacted — as a whole, home sale prices were not impacted by the placement of wind turbines in the area. On top of that, the land that wind turbines occupy can also be used for agricultural purposes, such as for crops or grazing land. That might indicate that wind turbines are actually aesthetically pleasing — after all, they are an iconic image of renewable energy.

The largest concerns typically come from a “not-in-my-backyard” (NIMBY) mentality, said Dallas Kachan, managing partner of Kachan Cleantech Analysis and Consulting. Some residents view wind turbines as an eyesore, and there’s a chance that the construction of wind farms will have an unexpected impact on indigenous wildlife and the environment. Some projects in California have even been scuttled because of unexpected environmental impacts, he said.

4 Trends Your Business Should Take Advantage of Now

by microent

Every once in a while it’s a good idea to sit back, take stock and assess how some of today’s current trends could benefit your business. Here are four to consider that have both marketing and operations implications for your company.

1. Going mobile. Mobile marketing is becoming increasingly important as consumer adoption of smartphones increases. Whether you market to businesses or consumers, your customers are increasingly accessing the Internet and using phones as shopping tools. But according to the fifth Small Business Success Index survey released recently, few small business owners currently use mobile marketing methods such as texting promotions to customers, creating a mobile site or mobile application, and advertising on mobile sites. Just 15 percent of entrepreneurs surveyed said these activities have the potential to be “extremely” or “very valuable” to their businesses. I think this is a big mistake. Young people are an obvious market for mobile marketing, but with smartphones becoming essential tools for everyone from soccer moms to businesspeople, no business can afford to ignore this trend.

And speaking of busy businesspeople, are you taking full advantage of your smartphone’s capabilities? With phones doing more and more, lugging your laptop is becoming less and less necessary. Whatever type of smartphone you have, explore its features so you can streamline essential tasks you need to do on the road.

Economic Forecasters: Crow or Eat Crow

by microent

Question: Every year it’s prognostications, prognostications. But seldom do “columns” like yours do a retrospective to compare what was predicted to what actually occurred, and to get the same prognosticator to have to defend his/her predictions and consequent outcomes. Further burnish your excellent work by bringing back some those experts to crow or eat crow.

Paul Solman: “Crow or eat crow.” Nice. But if you read this “column,” Dr. Audette, you know one of its iron mottoes, courtesy of the towering John Kenneth Galbraith: “There are two kinds of economists; those who don’t know the future and those who don’t know they don’t know.” We feature the former.

The closest we come to “prognostication” in our own work is admonition. That is, in picking which story to tell, we’re identifying an apparent trend or problem that, we think, could cause such significant change as to warrant attention. Using that criterion, we might crow about affording Nouriel Roubini his housing crash TV debut in November of 2006 and interviewing Nassim Taleb that same month, before the publication of “Black Swan,” on the “unknown unknowns,” as Donald Rumsfeld so pithily put it in his own defense. We even wondered about a housing bubble in a piece back in 2003.

Save On Gas With Auto Maintenance

by microent

This post is from staff writer April Dykman.

I’m awful at maintaining my vehicles. Spectacularly bad. I have always relied on someone else to take care of oil changes, check tire pressure, and whatever else cars need to have done on a regular basis. When it rains, I congratulate myself for having washed the car.

I’m not into cars, obviously — never have been. Vehicles simply get me from point A to point B.

The problem is that the other people I rely on, like my dad and husband, also have their own cars and maintenance schedules to remember. And, as I found out last week, not maintaining my car will cost more not only in the long run, but also every time I fill up my gas tank. Don’t make fun — I really didn’t know this! The mechanic helpfully explained how fuel injectors affect gas mileage. I knew it was time to start taking better care of my car.

Thinking that perhaps others might not know these things, and with gas at more than $4 a gallon in some places, I thought we all could use a maintenance schedule to help us squeeze every last mile out of each gallon of gas and improve fuel economy.

The following schedule will help improve engine performance and increase the miles per gallon, so you can save money on gas:

Afghanistan’s Enterprising Women

by microent

Gayle Tzemach Lemmon, author of <em>The Dressmaker of Khair Khana</em>

Even in the most favorable business climate, starting a company is no small feat. Imagine daring to set up shop as a woman under the Taliban regime. That’s just what Kamila Sidiqi did. Upon the Taliban gaining control of Kabul in 1996, Sidiqi’s parents and older brother left the city, leaving her to care for her younger siblings. But because the Taliban forbade women from leaving home without a male guardian, she was barred from working outside the home. To provide an income for her family, Sidiqi started a tailoring business. Her business grew to employ more than 100 women in her neighborhood.

In The Dressmaker of Khair Khana, published this month, Gayle Tzemach Lemmon tells the story of Sidiqi’s unlikely entrepreneurship. Lemmon, who worked for ABC News before earning an MBA from Harvard Business School, spent three years in Afghanistan interviewing Sidiqi and other women who launched businesses during the Taliban’s rule. Lemmon, now a fellow and deputy director of the Women and Foreign Policy Program at the Council on Foreign Relations, spoke with Inc. senior reporter April Joyner about the continued growth of women’s entrepreneurship in Afghanistan.

It’s impressive that Kamila Sidiqi sought to build a business that would provide jobs for others, not just herself. Did you find other women with similar aims, or were most of them running businesses for their own subsistence?
I saw both. You see a lot of “necessity entrepreneurs”: women who start businesses because there are no jobs they see as working for them and their families. They don’t necessarily see themselves as entrepreneurs, but what they’re doing is, on a small level, entrepreneurship. And people immediately understand the benefit of job creation, because otherwise, so many men would be supporting on their own 12, 13, 14 family members. Having a woman who earns income not only earns the woman respect but creates so much positive change for the family. So you see women who are very driven to create jobs and some women who are driven simply to make sure that they can support their families.

Why You Can’t Ignore Social Media

by microent

If anyone’s been in business long enough –which in this day and age is about ten seconds– they’ve heard that for any success in business, you must get on Facebook!

Or Twitter.

Knowing that it’s a great idea, and that with 500 million active users and counting, it’s where your audience most likely is. Twitter has over 190 million users Tweeting 65 million times a day.

Boosted by these numbers, knowing that odds are some of them are going to find their way back to your website, you set up an account with Twitter for your business and a fan page on Facebook.

Now what?

Well, if you read even a little, you’ll get bombarded with advice that you can’t afford to overlook StumbleUpon, Digg, Squidoo, and oh! You’re a business owner and you’re not on LinkedIn? What?

All those tools and applications and websites are collectively called “social media.” There are tons of communities, and you soon realize you simply can’t use them all.

This is where most business owners give up, and they disappear from Facebook, Twitter, StumbleUpon, LinkedIn, and all the rest, and then shake their heads when anyone tries to mention “social media” ever again.

It can be confusing, and if you try to make a go of everything at once –which for some reason is the most common advice– you’ll end up going nowhere fast.

Amazon beats Apple and Google to cloud music

by microent

Trying to beat rivals Apple and Google to market, Amazon.com announced tonight that it is launching a cloud-based music service. The service is an important one because it raises the possibility of creating a viable challenger to Apple’s current download-based iTunes music empire.

The Seattle-based online retailer said it will offer music playback on its web site as well as from any Android device. The advantage is that you don’t have to tie your music down to a single computer (Apple allows you to spread your music collection across five computers). Since it is stored in cloud servers, or Amazon’s centralized, web-connected data centers, you can log in from anywhere and get your music.

The long-rumored cloud-based music service went live on Monday night. You can buy music from Amazon or upload your own music to the cloud from a computer using Amazon Cloud Drive, or Amazon’s own online storage.

You can play back the entire digital music collection using Amazon Cloud Player on any Mac, PC, orAndroid phone or Android tablet. New purchases of MP3-based music from Amazon’s store can be directly saved to the Amazon Cloud Drive for free. The service will also work with music purchased from Apple’s iTunes, (but presumably only files that do not have Apple’s digital rights management security technology).

10 Greatest Salesperson Of All Time

by microent

John H. Patterson

The founder and CEO of the National Cash Register Co. was known to be a stern control freak. He was also the father of modern sales training. He was among the first entrepreneurs to organize sales training programs and retreats. His company provides salespeople with scripts, and encouraged them to view the sales cycle as a four-stage process that identified the key milestones as the initial approach, the proposition, the product demonstration, and closing the deal.

The legendary advertising executive who created iconic campaigns for Hathaway, Dove, Schweppes, and Rolls-Royce began his career in sales, moving cooking stoves door to door. He was so successful the company he worked for asked him to write an instruction manual that it then distributed to other members of its sales force. Filled with timeless advice, it became a cult classic. Among the advice: “The worst fault a salesman can commit is to be a bore. Foster any attempt to talk about other things; the longer you stay the better you get to know the prospect, and the more you will be trusted.”

A successful salesperson in Dallas, Ash quit her job in 1963 because, she said, a man whom she had trained was promoted above her at twice the salary. She planned to write a book, but her notes became instead a business plan for a beauty and cosmetics company that relied on women to sell merchandise to their friends and acquaintances through direct sales (otherwise known as multi-level marketing). She also pioneered the use of sales incentives, turning her company’s signature pink Cadillacs into a sign of women’s economic self sufficiency.

The Best (And Worst) Credit Cards In My Wallet

by microent

Reviewing credit cards from time to time for Outlaw means that I have far too many open and active credit card accounts — it can get challenging to keep track of them all.

Of course, only a few cards stay in my wallet on a regular basis. Although this post is admittedly a bit solipsistic, I thought it would interest readers.

Wondering which cards I use personally? Here’s the current breakdown of every piece of plastic in my brushed metal cardholder wallet (I don’t believe in carrying much cash, unless absolutely necessary; normally I fold up an “emergency” $100 bill and place it behind my cards):

- Citi Forward VISA: Despite the extremely low credit limit, which makes this card really more of a glorified Visa gift card than a legitimate credit card, Forward has been growing on me lately… so it’s been given a stay of execution and is now back in my wallet. Cool card design and I like how you earn points every month simply for doing normal responsible things like staying below your credit line and paying your bill on time. Plus, I have a bunch of ThankYou points saved up, and want to earn a bit more, so I can redeem for something cool.

Podio lauches a work app builder and business app store

by microent

Consumer have been eagerly downloading apps for their smartphones and tablets. Now business apps for mobile devices are gaining popularity.

Podio is launching what it calls the world’s first business app store and business app builder to help people at work create productivity apps with no need for technical expertise. The approach is a good example of how company’s can try to snare users by making it dead simple for them to create what they want themselves, as part of a “creator economy.”

The Copenhagen-based company will sell its Podio App Builder, which allows people to create custom work apps for business processes from recruiting to expense reporting. Users can build those apps within a matter of minutes. Podio is also unveiling its Podio App Store today with more than 200 business applications available for free.

Does Your Small Business Have a System?

by microent

Every aspect of business has it own unique set of rules. For example, management and building your team has rules. Connecting with your target market while seeing them as a single person with a specific need has rules. The daily operation of your business also has rules. Even though we are in business for ourselves and can do whatever we want, there are certain rules of engagement that can lead to success and certain violations that can lead to failure. These rules, procedures or standards have great impact on our bottom line.

In other words, it’s all about systems. If you put us in charge of anything, then we eventually come up with a way of doing it, because systems make “it” easier. Our personal morning routine is a system. Our coffee or tea before the first meeting is a system. The way the bank processes our money is a system. In fact, all the elements of business can be reduced to its most basic commonality—business is about systems that help us execute solutions for people.

Eight Fallacies of Entrepreneurship

by microent

Most new businesses are not big new ideas. We all read about the Groupons, but the vast majority of start-ups take an existing idea and try to do it better.

People start businesses for all kinds of reasons. Other people don’t start businesses for all kinds of reasons. Sometimes they are the very same reasons. I have compiled a list of frequently used phrases and comments that I often hear when people are discussing this decision and that I think reflect serious misunderstandings. At best, these misunderstandings can lead to a waste of time. At worst, they can lead to very bad decisions and very big losses. Here are my top eight:

1. Any new business has a 50-50 shot at succeeding. Yes, according to the Small Business Administration, the failure rate of new businesses is around 50 percent after five years. That statistic ought to be scary enough, but the odds of your business succeeding may not even be that good. Some ill-conceived ventures have no chance of succeeding, and others may have a 75 percent success rate. It is not the flip of a coin. It is about execution and the need in the market place. With new ideas, it is obviously harder to predict. What do you think the failure rate is for opening a McDonald’s restaurant?

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Microenterprise resources, grants, and information

The decline and fall of business ethics

AMD revises contracts to lower it’s chip manufacturing costs

How to Start Yoga Business

Why Wisconsin’s ham-handed crusade against wind power blows

4 Trends Your Business Should Take Advantage of Now

Economic Forecasters: Crow or Eat Crow

Save On Gas With Auto Maintenance

Afghanistan’s Enterprising Women

Why You Can’t Ignore Social Media

Amazon beats Apple and Google to cloud music

10 Greatest Salesperson Of All Time

The Best (And Worst) Credit Cards In My Wallet

Podio lauches a work app builder and business app store

Does Your Small Business Have a System?

Eight Fallacies of Entrepreneurship

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