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Showing posts from 2013

Detroit: A Wake-Up Call for Business Retention

It's easy to criticize Detroit's economic decline. Let's take the high road and think about solutions and possible prevention.

Whenever people and businesses leave, municipal tax revenues decline and quality of place degrades. As a result, taxes increase and services are cut causing even more people and businesses to leave. As tax revenues decline, the tax burden is spread across fewer taxpayers causing unit costs to increase driving even more people and businesses away. It is a vicious cycle.

People, businesses, cities, and growth are so intertwined and dependent on one another that a decline in any one particular area subsequently affects the others.

A possible solution is business retention. Business retention is making sure existing businesses stay, expand, and continue to grow. Businesses and their employees contribute significant tax revenues. It is widely known that 65 to 80% of new jobs are created through the expansion of existing businesses.

Surveys, roundtable…

Economic Development is Economics

There is no separation from time or resources. Time is limited. We have to decide how and where we spend it. Resources- the means to satisfy ends- are scarce. 
Herein lies the core of economics: solving for mankind's unlimited wants with  limited resources.
Economists study the disposal of scarce means. Economics is about studying human behavior as a relationship between ends and scarce means which have alternative uses.
Given nothing stays the same, economists examine how changes may affect choice and future decisions.
Economic development takes a look at the distribution of wealth within a specific geography and seeks solutions for improvement. 
Economic developers examine all facets of issues and opportunities affecting growth in a given area. The field spans a variety of topics including infrastructure development, business retention, business expansion, workforce development, and tourism.
The unlimited want in economic development is communities' desire to grow stronger a…

Early December Growth

So far December has shown strong numbers for the State of Georgia and the national economies. New data shows signs of investor confidence, more job opportunities, and quality economic development.

For the State of Georgia:
Royston: Pharma Tech Industries announced its expanding its manufacturing capabilities, creating 50 full-time jobs and investing $8.5 million.Cartersville: Toyo Tire will expand adding 450 jobs within the next two years and another 200 by 2017. The tire manufacturer will invest $371 million in the expansion.Dalton and Rome: Fortune 500 company Mohawk Industries will convert two manufacturing facilities in Dalton and Rome creating 420 new jobs and investing around $85 million over the next two years.For the U.S.: Unemployment fell to 7%- a five-year low and the lowest since November 2008. The US economy saw 203,000 jobs added in November. Significantly, more high-quality jobs were created than previously seen: professional and business services (35,000 new jobs), transp…

Meet Them There

For economic developers, relationships with local businesses is the foundation of your work.
Here's a tip: Get a monthly listing of new business licenses issued. You can find these at City Hall. The information should also have the address of the business and the business owner's name. 
After investing due diligence on the company, go introduce yourself. By doing this, you're taking a proactive step to building a lasting and trusted relationship. In addition, you're shaping their first impressions of your community, and you've likely added relief to the potentially-frustrating business start-up process.
Business owners/operators genuinely appreciate the welcome and support from their local economic development official.

Georgia Academy for Economic Development

Today I graduated from the Georgia Academy for Economic Development.

I highly recommend anyone involved in economic development in the state of Georgia to attend. The program is provided by the Georgia Department of Community Affairs and has been educating economic development practitioners and community leaders since 1993.

With many of Georgia's economic developers and community leaders having graduated from the Academy, I would say their training was a contributing factor to Georgia being chosen as "The #1 State in the US for Business" by Site Selection Magazine. Educated economic developers and numerous Academy alumni helped make that happen.

Fresh from graduation, here are 5 takeaways I would like to share with you:
What do "Property Taxes" tax? Real Property- Any property that is attached directly to land, as well as the land itself.Personal Property- Any property that is movable and is not affixed to or associated with the land. For example, furniture, bus…

Infrastructure is Essential

Infrastructure is the physical and technological support system needed for the delivery of goods and services.

Internet connectivity has risen among the top priorities for communities desiring to attract businesses and residents. Local governments today are pursing broadband internet, free public wi-fi, and even gigabit speeds across the nation.

Just as communities and cities compete for businesses, they also compete for the infrastructure that supports those businesses.

Yesterday, Georgia Governor Nathan Deal's administration won approval to invest $45M in water improvement projects. The money will allow Georgia to send more water downstream to Alabama and Florida.

The GA-FL-AL Water War has been raging since 1990. Alabama and Florida argue that Atlanta uses too much water upstream, leaving too little water downstream for businesses and wildlife. In fact, Florida sued Georgia earlier this year.

Neighboring states bickering over water goes to show just how important infrastructure…

Building Relationships with Entrepreneurs

As is true for the world of business, but especially for economic development, relationships are everything. As the economic development practitioner most of the business leaders, community leaders, and entrepreneurs that you need to meet aren't coming to you. You must take initiative and introduce yourself to them. To accomplish this, you must have tact. (This post focuses more so on introductions to entrepreneurs and small-business owners).
Schedule a meeting with the particular individual(s) you would like to meet. This may require some homework, but time well-spent. Search for the business owner's email address, office phone number, and office hours. In your research, make it a priority to find out something about the particular business. How can you say you'd like to "help" their business when you have not performed due diligence on the front end? Knowing something about the business you are meeting with will establish credibility and context to your conversa…

Three Business Development Takeaways

I am currently reading Journey to Jobs by renown economic development author and practitioner Maury Forman and accomplished economic development consultant Audrey Taylor. The book covers a variety of business recruitment and retention techniques and one I find particularly meaningful, business development.

Business development and retention guru Eric P. Canada contributed a chapter entitled "Existing Business Programs." Mr. Canada's writing on assisting businesses were of such great meaning and professional value that I decided to share three golden takeaways from his writing.
Don’t make any promises that can’t be kept. If a direct request is made, take down the details and offer to get back to the executive later. After the meeting, consider the company’s requests and check to see if others can help before returning with an offer to help the company. This is an enlightened approach to dealing with the assistance trap.Maintaining an open structure …

SPLOST's Special Purpose

Sales taxes are a large revenue stream for governments. They usually go by the name "SPLOST"- Special Purpose Local Option Sales Tax.

Try this: if you have an old receipt nearby from your last retail or restaurant purchase, look at the very bottom. Underneath the listing of all of your purchase items there is a column labeled "Subtotal" and another "Tax." The "Tax" amount you see is the sales tax received from your purchase. It is calculated as a percentage of all sales items, not each individual item.

Many governments, by law, use the sales tax dollars for capital improvements and not for immediate expenditures. In other words, the sales tax revenues must be used for projects that will upgrade, improve, or sustain any government-owned assets and infrastructure. This includes improving roads, bridges, sidewalks, and water and sewer systems to name a few.

The sales tax is an ad valorem tax meaning it is calculated as a percentage value of your ov…

Must Have Tourism

It is extremely difficult to establish a successful economic development program without including a  tourism strategy.

Tourism is oft-neglected and undermined by the shinier and more "fundamental" components of business retention and recruitment. However, tourism is a trillion-dollar domestic industry.

Tourism is the collection of activities of people traveling to and staying in places outsider their usual environment for leisure, business, or other purposes.

When visitors come into your community and shop at the local stores, eat at local restaurants, stay at local hotels, and spend their time and money at any local activities, festivities, or amenities, you have tourism.

Aside from visitors bringing in new revenue, tourism: provides a multiplier effect causing many businesses and industries to benefit; boosts a community's image; increases the tax base; creates jobs.

Consider these numbers released last month by the Athens (GA) Convention and Visitors Bureau:

2012 Econ…

Impact Fees: Fees for Impact

As cities and regions grow, so does the demand for infrastructure. As infrastructure demand increases so does the costs needed to maintain, improve, and expand that infrastructure. Governments used to fund those improvement costs. However, they grew smart. The rising tax collections necessary to fund these improvements plus the massive expenditures necessary for continual upgrades became too great.

Enter Impact Fees. Impact fees are payments made to a municipality by a developer (real estate or property) to pay for some, or all, of the physical improvements needed by a proposed development and its consequential impact on the community. Instead of raising taxes on residents, the developer bears most of the burden.

The revenue collected from impact fees can only be used for capital improvements such as sewer mains, streets, water lines, parks, schools, and public safety.

For more info on impact fees, check out these sites:…

Establishing the Link

Among the many hats than an economic developer wears, there is perhaps none more important than that of 'connector.'

Economic developers link people. We link entrepreneurs with local/county/state/federal business resources. We link businesses looking for available real estate or empty office space to landlords and property owners. We facilitate business to business match-ups. We represent public and private sector interests.

We bridge gaps. We connect dots. We make matches. We establish the link.

Hungry? Eat Local.

Aside from providing convenience, jobs, and (hopefully) great food, here are 3 reasons why you should feed that hungry tummy at a local restaurant.

Eat local. Support yourself. Money always flows to the headquarters. Depending on its financials, headquarters contribute a significant amount of revenue to its local tax base. If/when the headquarters is local (as is the case of a locally-owned restaurant), much of the money they earn is pumped back into the local economy via taxes. The taxes pay for better community services such as police, fire safety, schools, roads, etc. Eat local. Support other local businesses. Most locally-owned restaurants do not have national and international suppliers like national chains. Therefore, local restaurants buy many of their supplies from other local businesses. These business-to-business transactions support growth and revenue for other local businesses which ties back into reason number 1.Eat local. Support your community. Local restaurants give com…

Blight: Afflict Then Attract

The term "blight" is used to describe any structure(s) in a state of deteriorating, defection, uninhabitable, or in dire need of improvement. It's mostly heard in urban settings and old factory towns where many of the older building structures have endured decades of weathering, multiple uses, and damage (both natural and man-inflicted).

In recent years there has been a push among cities across the nation to either remove or renovate the blighted buildings. For a number of reasons, these programs make sense. Here are a few reasons why. The removal of blight:

Improves local imageMakes better use of existing buildingsPrevents vagrancy, vandalism, and abandonmentIncreases business and employment opportunitiesGenerates tax revenue From an aesthetic, economic, social, and historical perspective, blighted buildings carry tremendous growth potential. A blighted building could be restored to become a large employment center, a new pharmacy (as pictured below), or even recreation …

Hospitals ARE Economic Development

We know importance of hospitals for their healthcare benefits and services offered 365 days a year. However, we rarely emphasize their economic impact.

Hospitals, as institutions, invest heavily in research & development, machinery, utilities, bed linens and drugs, etc. Hospitals' high reliance on these goods and services makes them large consumers of other products. The demand for these goods sends a ripple effect through the economy causing another round of spending and hiring by suppliers and other firms. Hospitals also trigger tourism when the families of patients stay in nearby hotels and visit nearby stores and restaurants.

Hospitals, as employment centers, employ a large number of people: surgeons, nutritionists, accountants, custodians, technicians, etc. Those workers spend their money in the community which supports other businesses and generates tax revenue for government services (roads, fire, police, schools, etc.).

Hospitals are here to stay because there is alway…

Economic Assets & Liabilities

Creating an inventory of the community's economic assets and liabilities is the very first, most fundamental step in creating a successful economic development strategy. Simply put, it's looking at what makes the area good for business and what doesn't.

An economic asset is anything that makes the region unique and better for businesses. This may include close proximity to an airport, a railroad running through town, a low crime rate, or an above-average school system. Assets make the community more attractive to businesses.

An economic liability is anything that doesn't make the region attractive to businesses. This may be a poorly maintained infrastructure, unreasonably high taxes and impact fees (water and sewer), a high crime rate, or a failing school system. Liabilities may run the businesses away.

Three things must happen once the assets and liabilities are gathered:

Assemble knowledgeable people who can help you strengthen the assets and weaken or eliminate the l…

Multipliers: Retail is Good

Retail is responsible for a great deal of economic activity. Here are some of the multipliers, or economic consequences stemming from retail transactions.
First and foremost, when you purchase something at the retail level, you are purchasing a product that was manufactured and transported to you. It was not created on site. Therefore, the retailer has to pay the actual  producer some percentage of the dollar amount you spent. When this happens, money leaves the retail sector and flows to the industries where the actual production and distribution took place.
Second, all retailers purchase inputs from regional suppliers: shop space, utilities, advertising, etc.
Lastly, all retailers must pay their workers, who in turn, spend their money.
A few other benefits of retailers include: leakage plugging, shopping options, visitor attraction, and complementary purchases at other stores. It's rather easy to see how other industries and businesses benefit economically from the existence of…

During the Day I...

Better Fire Protection, More Jobs

Every fire district is graded based on ISO's (Insurance Services Organization) PPC (Public Protection Classification) evaluation. The better the district's PPC, the greater chance businesses and homeowners save money on their insurance premiums. That's because insurance companies use PPC data for marketing, underwriting, and to establish fair premiums for homeowners and commercial fire insurance.

While the direct effects of a high PPC are better fire protection, fewer fire losses, and lower insurance premiums, one large indirect effect is encouraged business investment due to the lower insurance premiums. And if property owners (both home and commercial) spend their savings in the community, that money helps improve the local economy. As an added benefit, communities with better fire protection often find it easier to attract new businesses therefore increasing jobs, growing the revenue base, and achieving a competitive advantage.

Fire services not only constitute an impor…

The 3 I's of Economic Development

The 3 I's of Economic Development. Where one or more the 3 I's is at a stage of growth, increase, or improvement,  the better off a community is likely to be. This means that jobs are created, the tax base is expanding, and a higher quality of life is being enjoyed by citizens. The more of the three, the greater the likelihood that economic prosperity is either being enjoyed or will be enjoyed by the respective benefitting region.
Infrastructure- The physical support system needed for the delivery of goods and services. It includes water, sewer pipes, roads, bridges, cables, water, telecommunications, power, and sewage treatment plants. Infrastructure is essential to ALL businesses and citizens alike. The better a region's infrastructure, the more favorable that community is to business and commerce.Investment- Jobs are created when businesses invest. Typically these investments include equipment and machinery and the people to operate them, sales people, managers, and oth…

Waves, Ripples & Multipliers

Throw a rock in the water and what do you get? Waves. A constant, outward stream of ripples stemming from the initial point of where the rock hit the water. The rock hitting the water is the initial activity and the ripples are the effects of the rock hitting the water's surface.

The same is true in economics. One activity triggers a wave of other activities. "Multiplier" is the name we give to those consequential activities. A multiplier is any activity that spurs other spin-off activities, or ripple effects. We use multipliers (in the form of a ratio) to determine the economic impact of a certain activity, such as a plant choosing to locate in your community, a big music festival coming to town, or even the money you spend from your paycheck.

Economics is all about linkages. Business sectors and industries that have large multipliers are those that are greatly linked to other forms of spending and investment, whether directly or indirectly. For example, the manufactur…

Investment Creates Jobs

Investment creates jobs. When a particular region or community is favorable to a particular industry sector or company, it will choose that specific place to build a facility and conduct its' operations. These investment dollars go towards building the actual facility, utilities, sanitary sewer, water, telecommunications, equipment, and other business needs. One of the most important metrics of these sorts of investments is the number of jobs created. This is the metric that media outlets and politicians love to broadcast.
It's actually the private investment dollars that communities and economic development entities compete for. That's because investment is usually a direct indicator of confidence and growth.
In a nutshell, here is a basic description of the job creation process: 1) A plant expansion, location, or re-location requires new machines and machine operators. 2) New machines increase output, which necessitates more inventory handlers, shippers, salespeople, mana…

Rhythm & Life

Central to all music is rhythm- the pattern of regular or irregular pulses. This is extends beyond music and into nature. The movement of tides in the ocean are essentially, rhythmic. The activity of the solar and planetary system can also be considered rhythmic, on a much larger scale.

Your eyes blink, your heart beats, your legs walk, the patter of raindrops, the flow of a brook, the clock's tick- all rhythm. Rhythm is the skeleton of music. That skeleton only makes a complete body when the flesh and blood of melody and harmony have been added.
Rhythm is a physical stimulus; it's the response of a reflexive action, and it's entirely natural. A child's first attempts at making music consists of beating on something (hopefully that something is inexpensive and can be easily replaced).
The rhythm element of music is just as natural as rain, breath, and any other involuntary force on this beautiful earth. Essentially, rhythm, and ultimately music, are just as indigenous …

Regionalism in Economic Development

When it comes to economic development, regions that work together have more success.

The largest city in an area may have the most name recognition nationally or internationally, but it's the nearby cities and towns in the area that may actually claim many of the jobs and residents (in a beneficial way, of course). Think about this: Seattle is not actually home to much of Boeing and Microsoft Renton and Bellevue, Washington are. Portland is not actually home to Intel or Nike; Beaverton and Hillsboro, Oregon are.

Regional partnerships are necessary for present-day economic development efforts. One city, no matter its size and reputation, only has limited resources. However, when combined with other surrounding cities and communities, resources (money, infrastructure, education, amenities, etc.) can be pooled together collaboratively.

A regionalistic (just made that word up) makes business attraction, retention, and expansion efforts easier. The adage "it takes a village to rai…

FundaMusic: Fundamentals of Music

Just as it is more fun to watch a football or baseball game if you know something of the rules, so it is more fun to listen to music if you have some idea of what is it's all about.

I define music as the organization of sound toward beauty. Notice it's "toward beauty," not "to beauty." The artists' work is in the direction of beauty, even though he/she may not always attain it. Music isn't about perfection, it's about expression.

Think of music as a practically continuous stream of sound containing patterns. The raw materials of music are sound and time. Behind these technical materials are the thoughts, moods, and emotions of the artists.

An artist is one who succeeds in transferring his/her thoughts, moods, and emotions to other people. Since we're all humans, anyone is capable of communicating and understanding these expressions, whether its with our voice or an instrument. Therefore, music is a universal language that anyone can make an…

What is Economic Development?

Economic development is a program, set of policies, or activity that seeks to improve the economic well-being and quality of life for a community/city/region. Ideally, it will create and retain jobs that promote growth and provide a stable tax base.

It's the work of economic development to keep jobs in the community and create a favorable climate for new job growth by providing support to businesses. This is done in a variety of ways whether its offering economic development incentives, consulting with lawmakers, or speaking with the municipal infrastructure-related authorities. Economic Development takes many forms and when done properly, benefits not just its immediate community, but creates a ripple effect of positive economic impact for surrounding regions.

Stories, Lies & Truth

Our natural tendency is to tell stories: what we did all day, how we met our spouse, the fun we had last vacation. In telling every story we face the delicious temptation to add in a little fiction or quite frankly, lie. When we were kids our parents called this "telling a story," a nice way of saying we were caught in a lie.

Sometimes this truth-stretching is involuntary. We forget certain facts. We jumble the order of events.We tell our stories in ways that make ourselves look big, powerful, and almighty. We leave out some details that may seem irrelevant.  Our perspectives are limited.

What's left out can change the story- greatly. Therefore, to make sure we get the story right, rethink the entire matter. Put yourself in someone else's or something else's shoes. Then before you put it in writing or tell your story, decide on the form in which you will present your tale: opinion, meditation, analysis, judgement, fancy, interpretation. 

3 Creative Secrets You Should Really Try

To give birth to creativity, the mind needs to be given a chance to flow. Listed here are 3 creative secrets that I have never ever ever shared with anyone, until now. This is the same stuff that business plans, songs, movies, books, solutions, philosophies, and all sorts of inventions and ideas are made of. Probe your mind by trying these three things.
Spend an entire day listening to music you normally don't listen to. Talk about a mind-opener. Try it and you'll know what I'm talking about. Wells of creativity and fresh ideas will flow from you.Go to the library. Libraries are a gold mine of information. Take your time, walk slowly, and browse the shelves. Before you lies ancient knowledge and secrets that are so often overlooked in our present digital age.  The best thing is all of this information is FREE! Centuries of the world's most valuable information at absolutely no cost.Have a brainstorming session. Gather a friend or two (or more) and share your most creati…

Newer Homes, Bigger Homes

The sequester is a major negative for government spending, and higher taxes may slow consumer spending. But the US housing sector is primed to be a shining star for economic growth this year. New housing project starts rose 0.8% to 917,000 in February. Building permits increased to 946,000- the best in 5 years. That's not all. The size of these new homes are also increasing.

According to the US Commerce Department, the median size of a new home started last year stood at a record 2,309 square feet, surpassing the previous high of 2,259 in 2006.Even more important, since a bigger home usually requires more materials and labor input, the combination of more homes and bigger home size should add to economic activity and payrolls this year.

The numbers are already talking. Residential construction added slightly to 2012 gross domestic product (GDP) growth. Construction payrolls started increasing again last summer and are rising at a 30,000 monthly pace over the last 5 months. The avera…

The Price Is Right

Where there is a price there is value. If what we want came easily, we wouldn't appreciate it. Therefore, it's only right that it be earned or paid for. In 1776, American Revolution writer and patriot Thomas Paine wrote:

"What we obtain too cheap, we esteem too lightly; 'tis dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed, if so celestial an article as freedom should not be highly rated."
Of the 56 signers of the Declaration of Independence, 5 were captured and tortured by the British. 9 died in the Revolutionary War. 12 had their homes either locked, broken into, or burned by the British. 2 lost their sons in the war and 1 had 2 sons captured. For the signers of the Declaration, the price of freedom was high. 
Christ and His disciples' lives were in much more danger. Christ is the ultimate example dying an unimaginable death to give eternal life for all who believe. My point is…

Yams For Thought

YAMS: You Achieving More Success. I just made that up! Pretty cool, right? That came partially because I am starving at this very moment...

Take some YAMS for your mind. All of them stem directly from a Creative One's Session led by award-winning recording artist Antonio Neal held last year in Smyrna, TN. This guy is a wellspring of creativity and innovation. If you're ever in the Memphis area, you definitely want to be somewhere near him!

Enjoy your meal and drop me a comment!

Never compare yourself to anyone else. You're an original. In everything you do, people will love you and people will hate you. Focus on those who love you.What's wrong with your creativity? What's wrong with your style? What's wrong with the way you see the world? NOTHING- God makes originals.If you wake up every morning and aren't exciting about you, then why should you expect others to be?Spend an entire day listening to music you don't like, it'll change your life.
Thanks for…

Federal Deficit Spending Part II

Continuing the previous post on federal deficit spending...

Another reason why the federal government can safely run a deficit is that the government's money comes from taxes. Therefore, any and all money that the government spends is money from taxes. The government's expenditures are counted as GNP or Gross Domestic Product, making it largely available to recapture by taxation. Thus, the government's ability to earn money is far greater than any single business, in fact it's far greater than almost all US businesses combined.

Business firms owe their debts to someone other than themselves where they have no control- whether it is bondholders or the bank they borrowed the money from. So to pay its debts, businesses have to transfer funds of its own possession into the possession of bondholders. If this transfer cannot be made and a businesses does not have the funds to pay its bondholders or lender, it will go bankrupt.

The government- its bondholders, banks, people, and…

Federal Deficit Spending Part I

There's much talk, argument, and debate about the federal deficit. Although all of it is not nonsense, in truth much of it is. Businesses and big corporations spend on deficits all the time. In fact, a business spending more than it takes in is considered healthy, normal, and safe.

Large corporations, through loans from banks, takes the savings of the public to build new plants and purchase new equipment. Much of the time, a business' expenditures on capital equipment are greater than its sales, although that info is hidden from stockholders. Instead of calling this spending behavior a "deficit," they call it "investment." In a posting last week, we looked at why a business must spend more than it takes in.

Businesses run deficits as long as they want because once their bonds come due and must be paid back, corporations issue new bonds of equal value to the old ones, then sells the new bonds and uses that money to pay off its old bondholders.  Through this be…

A Cup of Music

Music is like water: it can take on any shape, size, form, mass, or volume (pun intended) while keeping its true integrity.
Water is water, whether it's sitting in a muddy Louisiana swamp, coloring the wondrous shores of Brazil or filling the contents of an overpriced FIJI bottle. Water is water.
Music is music, whether it's heard through the smoothness of r&b, the tales of country, the beat of hip-hop, the complexity of jazz, the stirrings of classical, the instrumentation of folk, the energies of pop, synthesizers of techno, or screams of rock. Music is music.
Regardless of preference, figure, or texture, they remain undeniably true to their state: water is water and music is music. 
Water and music are capable of taking whatever shape you want them to. Water has its ice, beaches, swimming pools, and the blessed ability to hydrate and cool us down on hot summer days. Sometimes music can describe our situations better than we, ourselves, can. Music can be motivation to make a…

Households & Businesses Interlock

This entry comes as a continuation of my last posting.

Here are a few of the many ways the household sector and the business sector interlock:

The Business Sector employs workers from the Household Sector. Without the labor and intellect supplied by the Household Sector, the Business Sector would crumble.The Business Sector pays the Household Sector in wages, earnings, and salaries. Without income, many a Household would crumble.The Household Sector spends its earned income from the Business Sector to purchase goods and services supplied by the Business Sector.The Household Sector invests its earned income from the Business Sector in stocks, bonds, and mutual funds which become revenues for both sectors.Ultimately it is the Household Sector (people) that creates new Businesses.(Repeat Cycle)

The business sector has no taxing power. For business, the only way to sustain on a large scale is for money to be voluntarily relinquished by the household sector. Economic growth takes place thro…

Household & Business Spending Flow

Where does household spending come from? 

Household spending comes from household earnings-- wages, salaries, rents, dividends, profits, or whatever other payments householders receive from the work they have performed. It also comes from transfer payments from the government such as Social Security checks. The flow of spending can be raised if households draw from their savings accounts, borrow money, or liquidate stocks or bonds.

Like the household sector, the business sector buys its ordinary day-to-day requirements from the money it makes from sales. However, there is one huge difference between household spending and business spending. The business sector does not normally save money. On the contrary, it spends more than it takes in. 

How can corporations buy more than they take in?

Business does not spend all of its earnings. It saves a portion of these earnings as "profits," and meanwhile borrows additional financial revenues from banks or by selling its stocks and bonds.…

The Cost of New Business

In our present day economy, with the job growth rate sluggish and high unemployment numbers, cities and regions are fighting for new and existing business growth now more than ever. This is by all means reasonable because those business create jobs for citizens, stimulate further capital investment, and helps spur other further BRE (Business Retention and Expansion) efforts.

The benefits of any sort of economic development project trigger a long line of ripple effects for employment, spending, taxation, quality of life, and expanded public services.

Consider this, if X Industry decides to build a new facility in your city bringing with it 200 new jobs,  you and I will be taxed to finance the public services for the new acquisition. X Industry will demand the necessary water, sewage, and roads on their property as well as the public services of policemen, firemen, etc.

The local government, as it should, will conduct a fiscal impact analysis to calculate how it will properly finance t…

Appreciation: The Music of Life

One of the first people in American business to have a salary of over one million dollars was Charles Schwab. He was selected by Andrew Carnegie to become the first president of the newly established United States Steel Company in 1921. Schwab wasn't a genius. He wasn't even the smartest in his industry. When asked in an interview for the secret to his success, Schwab stated:

"I consider my ability to arouse enthusiasm among my people the greatest asset I possess, and the way to develop the best that is in a person is by appreciation and encouragement. There is nothing else that so kills the ambitions of a person as criticisms from superiors. I never criticize anyone. I believe in giving a person incentive to work. So I am anxious to praise but loath to find fault. If I like anything, I am hearty in my approbation  and lavish in my praise. I have yet to find the person, however great or exalted his station, who did not do better work and put forth greater effort under a sp…

Musical Interpretation

Interpretation is one of the great qualities that everyone, musically-gifted or not, enjoys about music. It's totally up to the creators and listeners to determine the music and lyrics' meanings. 

Consider the jazz standard "All the Things You Are." You could spend a whole day sifting through various YouTube versions of this 1939 classic. Everyone from Frank Sinatra to Michael Jackson have renditions of it (click the links below).

As listeners, we have all experienced hearing a new interpretation of a familiar song. This experience exposes our minds to a new approach foreign to our ears. The new interpretation causes us to realize that the version or style we're familiar with isn't the only one. We may or may not like the new interpretation, but we can still acknowledge and appreciate it.
Like any other art form, music is interpretive. The same song may carry a trillion different meanings to many different people. There is no standard for measuring the mental, e…

Tax Breaking the Cliff

Included in the fiscal cliff tax package passed by Congress on New Years' Day are billions of dollars in tax breaks that should make business of all sorts of industries happier. The new tax law includes tax breaks for industries from film production to rum importation. 

A tax break is anything that reduces the amount of total taxes an individual or business must pay. They mainly come in four forms: tax credit, tax deduction, tax exemption, and tax rebate

More than 50 temporary tax breaks were renewed through 2013, totaling to about $76 billion in savings for their beneficiaries. Due to the breaks' temporary status, tax break renewal attracts heavy lobbying and campaign contributions from the businesses and trade groups that say the the tax breaks help them prosper and create jobs.
Here are some of the provisions enacted in the new law. Take a close look, some of them may benefit your business or industry: A tax credit for research and development, benefiting many industries incl…