This is a frightening prospect for many small businesses: Pay Up: Philadelphia City Paper

For the past three years, Marilyn Bess has operated MS Philly Organic, a small, low-traffic blog that features occasional posts about green living, out of her Manayunk home. Between her blog and infrequent contributions to ehow.com, over the last few years she says she’s made about $50. To Bess, her website is a hobby. To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut.

In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license.

“The real kick in the pants is that I don’t even have a full-time job, so for the city to tell me to pony up $300 for a business privilege license, pay wage tax, business privilege tax, net profits tax on a handful of money is outrageous,” Bess says.

It would be one thing if Bess’ website were, well, an actual business, or if the amount of money the city wanted didn’t outpace her earnings six-fold. Sure, the city has its rules; and yes, cash-strapped cities can’t very well ignore potential sources of income. But at the same time, there must be some room for discretion and common sense.

When Bess pressed her case to officials with the city’s now-closed tax amnesty program, she says, “I was told to hire an accountant.”

She’s not alone. After dutifully reporting even the smallest profits on their tax filings this year, a number — though no one knows exactly what that number is — of Philadelphia bloggers were dispatched letters informing them that they owe $300 for a privilege license, plus taxes on any profits they made.

Even if, as with Sean Barry, that profit is $11 over two years.

Barry’s music-oriented blog, Circle of Fits, is hosted on Blogspot; as of this writing, its home page has two ads on it, but because he gets only a fraction of the already low ad revenue — the rest goes to Blogspot — it’s far from lucrative.

“Personally, I don’t think Circle of Fits is a business,” says Barry. “It might be someday if I start selling coffee mugs, key chains or locks of my hair to my fans. I don’t think blogs should be taxed unless they are making an immense profit.”

The city disagrees. Even though small-time bloggers aren’t exactly raking in the dough, the city requires privilege licenses for any business engaged in any “activity for profit,” says tax attorney Michael Mandale of Center City law firm Mandale Kaufmann. This applies “whether or not they earned a profit during the preceding year,” he adds.

So even if your blog collects a handful of hits a day, as long as there’s the potential for it to be lucrative — and, as Mandale points out, most hosting sites set aside space for bloggers to sell advertising — the city thinks you should cut it a check. According to Andrea Mannino of the Philadelphia Department of Revenue, in fact, simply choosing the option to make money from ads — regardless of how much or little money is actually generated — qualifies a blog as a business. The same rules apply to freelance writers. As former City Paper news editor Doron Taussig once lamented [Slant, "Taxed Out," April 28, 2005], the city considers freelancers — which both Bess and Barry are, in addition to their blog work — “businesses,” and requires them to pay for a license and pay taxes on their profits, on top of their state and federal taxes.

Mannino says the city doesn’t keep track of how many bloggers and small-website owners are affected. But bloggers aren’t the only ones upset with the city’s tax structure. In June, City Council members Bill Green and Maria Quiñones-Sánchez unveiled a proposal to reform the city’s business privilege tax in an effort to make Philly a more attractive place for small businesses. If their bill passes, bloggers will still have to get a privilege license if their sites are designed to make money, but they would no longer have to pay taxes on their first $100,000 in profit. (If bloggers don’t want to fork over $300 for a lifetime license, Green suggests they take the city’s $50-a-year plan.)

Their bill will be officially introduced in September. “There’s a lot of support and interest in this idea,” Green says.

Perhaps, but it doesn’t change the fact that the city wants some people to pay more in taxes than they earn. “I definitely don’t want to see people paying more in taxes and fees than what [we] earn,” says Bess. “But I do think the city needs to establish a minimal amount of money that they won’t tax, whether you’re a bike messenger, microblogger or a freelance typist.“

I saw this article a couple of days ago, and have been thinking about it a lot. It seems to me that this “business privilege tax” is just a step away from infringing on free speech. I suppose that we would need to look at the details of the law to determine if this license only applies to the blogs and websites that generate revenue from ads, or if it applies to a blog that is used as a marketing platform for a freelance worker of any kind…

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Seth Godin is an amazing thinker. In a recent post he outlines some of the foundation elements for modern businesses.

When you sit down to dream up a new business, you can imagine a world without constraints. Or you can choose to build in fundamental pieces that will make it more likely your idea will pay off.

Here are some fundamental pieces of most new successful businesses. The goal is to build these elements into the very nature of the business itself, not just to tack them on. For example, the Scotch tape people at 3M can’t do #5, because of the structure of retail distribution and the way they mass produce and can’t track who is buying what.

You can live without some of these, but go in with your eyes open if you do:

1. Build in virality. Consider: Groupon.
2. Don’t sell a product that can be purchased cheaper at Amazon.
3. Subscriptions beat one-off sales.
4. Try to create an environment where your customers are happier when there are other customers doing business with you (see #1).
5. Treat different customers differently.
6. Generate joy, don’t just satisfy a need for a commodity.
7. Rely on unique individuals, not an easily copyable system.
8. Plan on remarkable experiences, not remarkable ads.

Read the whole thing here (Foundation elements for modern businesses.)

How can you treat your customers differently from what your competition does? I think that building “remarkable” into the experience is a very important part. What do you think? Leave a Comment.

In my post last week (Would you pay for Twitter?) I got a comment from a reader who asked:

“Here’s my question, if you are a business and offer a lot of things for free, how do you parley that into appropriate revenue without disengaging your audience?”

That is a very good question, and one that every business (or would-be business) should be asking. I started thinking about this a couple of years ago, posting this article (How Can You Measure the Value of a Conversation?) in October ’08. Here is the heart of the message:

Make money “because of”, not with

The “because of” effect is much more powerful than the “with” effect. One of the commenters on Jason’s post, Mack Collier (The Viral Garden), hits the nail on the head with:

…companies that are NEW to social media, wanting to use metrics and measurements that they are used to when using TRADITIONAL marketing methods to ‘get their message out there’. Their thinking is ‘how do we make money from this?’, whereas companies that have been active in this space for a while, such as Dell, understand that by PARTICIPATING that they will make more money as a BYPRODUCT of their efforts. Dell has been in the game long enough to see the impact that their efforts are making, and as a result have shifted away from the ‘how do we make money with this?’ mentality.

Attempting to DIRECTLY monetize social media efforts is the quickest way to ensure they fail. But companies that aren’t familiar with this space don’t know any better. In a few years, after more companies are more familiar with these tools, I think we’ll see them looking to INdirectly monetize their efforts, while putting the focus on SM as a way to DIRECTLY connect with their customers.

One of the best lessons that I learned from the SOBCon event that I attended in May was that blogging (and Social Media in general) should be treated like a business. That business is the marketing of your products and services & establishing yourself/your business as an authority. The goal of that business is to make money because of your blog (or Social Media efforts), instead of with your blog.

Let me repeat that for you – “by PARTICIPATING [you] will make more money as a BYPRODUCT of [your] efforts”.

Money as a by-product of participation

How exactly does this work? Well, it is both easier and more difficult than it sounds. The very first thing that your business can provide for free to its customers is Value. Something above and beyond the products and services that gives your customers a reason to visit your place of business or website, or follow you on Twitter, or friend you on Facebook (this list goes on and on).

For a real-world example, using a “place of business”, look at Starbucks. The mental images of the starving artist or writer slaving away over a venti latte, or the entrepreneur using Starbucks as an office are so common as to be a cliche. But they are a cliche because Starbucks offers something that places like McDonald’s do not – a welcoming atmosphere with music and ambiance, access to coffee and snacks, and typically like-minded folks to chat with. That is the value. That is what makes people come back.

Now, this example is not representative of what you can do with Social Media, or is it? Imagine that your blog or website is the Starbucks, how do you go about inviting people to come and hang out there? Give away some cool, free stuff. I’m talking about your blog posts, or FAQs on your industry, or whatever it is that draws people to your site in the first place. Give them the answer or information about the solution to the problem that they have, then give them even more. Add value.

Then add an opportunity for your visitors to have a conversation.

If you let them speak they will come

Online communities are exploding in popularity and will continue to grow. As Clay Shirky discusses in his book Cognitive Surplus (review here Thoughts on Cognitive Surplus) people crave community and the online space has the lowest barrier to entry, ever. Letting your customers talk to you and to each other gives you a Starbucks-like place for your potential marketspace to congregate. Then, and only then, can you get involved in the conversation – providing that added value, building your credibility and authority, and finally creating a rapport that invites your community to ask to buy something from you.

Jeffrey Gitomer says “People hate to be sold, but they love to buy”

In his Little Red Book of Selling (which every blogger and business person should read by the way) Gitomer says, “If they like you, and they believe you, and they trust you, and they have confidence in you…then they may buy from you.” That is what you are doing when you build the community and marketspace. Do ask compelling and engaging questions. Don’t sell your product or service.

Ask the community what they think. Talk about profit and productivity. Remember, they are taking the time to be involved in their community, not your community, it all needs to be about them.

I trust that this has given you some ideas for your own business and how to apply this concept to create more sales as  by-product of your Social Media activities. If you still have questions and are interested in being the feature of a case study on this topic (to be published for free on this site), please send me an email and we can talk about your situation.

Workspace: Meet at The Apartment :: Articles :: The 99 Percent

Meet at the Apartment also revolutionizes the concept of a meeting by taking meetings into new territories – places that inspire a different kind of thinking and interacting. For example, “One of the signature features of Meet At The Apartment is that you can brainstorm while sitting around the kitchen table. We recognized that everyone loves to hang out in the kitchen, eating snacks and brainstorming. So we put a meeting table in the kitchen!” In addition, specific design choices were made to optimize focus and attention. As they explain, “Meet at the Apartment employs a very stylized black-on-black décor throughout the upstairs area of our space. It was not only a design tactic but also a strategic decision, as it dismisses distraction and allows the guests to be the focus.”

[...]

And to ensure that any meetings are successful, Marc and Sara rely on four basic rules:

1. Bring outside people into the meeting to facilitate and participate. Bring in people that are in a different business than you are to lend a fresh perspective.
2. Think through the flow of the entire meeting and optimize the right times to brainstorm, take a break, etc.
3. Prioritize on action – make sure you don’t leave the meetings and jump right back into your daily workload. Leave with tangible next steps and fast-track the results. Follow up — make sure the meeting is not a one off.
4. Every meeting should have a moment of celebration – when people get together you should celebrate success and people on the team. Embrace things that are moving in the right direction.

We agree that workspaces and meetings should be re-thought, so we’re glad that spaces like Meet at the Apartment will be popping up in cities around the world. Hopefully, they’ll set the bar for everything else!

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A recent survey has some pretty surprising results:
Survey – How Many Would Pay For Twitter? Zip, Zilch, Zero – NYTimes.com

If microblogging service Twitter was entertaining even the slightest notion of charging for its service, then it might want to reconsider. A recent survey of nearly 2,000 people found that zero percent – you heard correct – of respondents would pay to use the service.

The survey, conducted by the University of Southern California’s Annenberg School for Communication and Journalism, is part of its yearly “Digital Future” report, which looks at the overall state of the Internet in the U.S., from adoption to views on advertising and paywalls.

Jeffrey Cole, director of the Center for the Digital Future, said that the response shows just how difficult it can be to begin charging users for services and goods they already receive for free.

“Twitter has no plans to charge its users, but this result illustrates, beyond any doubt, the tremendous problem of transforming free users into paying users,” said Cole. “Online providers face major challenges to get customers to pay for services they now receive for free.“

Well, now. I have to say that I am extremely skeptical of that survey, as I would pay as much as $50 a month for a “Power-user” account on Twitter, or perhaps to Tweetdeck for the information and connections that it provides.

I could definitely see a multi-layered version of Twitter, following the example of other online services that provide basic features for free and more powerful features for paying members. Even third-party providers such as Tweetdeck, Seesmic, or Hootsuite could benefit from a tiered user business model.

In fact, the NYT article goes on to say:

While the survey came up with nobody saying they would pay for the service, we have to imagine it was just missing the proper segment of the population. Our own reader poll (last year, at that) found that 20% said they would pay under $5 a month to use the service, while 66% said they would pay nothing. As for our own Marshall Kirkpatrick? He said that he would easily pay $50 per month for what he gets out of Twitter for a number of reasons.

Here is some of what Kirkpatrick has to say about Twitter:

Twitter is an incredible professional development tool. I know that’s the case for journalists and I strongly suspect that it is or will be used in the same way in lots of other industries. You show me an industry where you can’t find a competitive advantage in learning more, faster and from highly active people in that industry and I’ll show you an industry that I at least am thankful I don’t work in.

Ditto that. When I was freelancing I was getting tons of referrals and leads from Twitter, which like Kirkpatrick paid my rent and car payment. Not too shabby.

Even though I now have a full-time job managing a restaurant, I use Twitter and Facebook to promote and communicate with my customers. I could be using it more and better, and frankly if I had to pay for that access I would. (In addition, the demographics in the region makes the online marketing kinda tough – the locals are not as “plugged-in” as they tend to be in a larger market.)

What are your thoughts on paying for Twitter? Yes, no, maybe? Share in the Comments.

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For those of you out there with websites and blogs built a few years ago there is some important news from WordPress:

WordPress › News » PHP 4 and MySQL 4 End of Life Announcement

Our approach with WordPress has always been to make it run on common server configurations. We want users to have flexibility when choosing a host for their precious content. Because of this strategy, WordPress runs pretty much anywhere. Web hosting platforms, however, change over time, and we occasionally are able to reevaluate some of the requirements for running WordPress. Now is one of those times. You probably guessed it from the title — we’re finally ready to announce the end of support for PHP 4 and MySQL 4!

First up, the announcement that developers really care about. WordPress 3.1, due in late 2010, will be the last version of WordPress to support PHP 4.

For WordPress 3.2, due in the first half of 2011, we will be raising the minimum required PHP version to 5.2. Why 5.2? Because that’s what the vast majority of WordPress users are using, and it offers substantial improvements over earlier PHP 5 releases. It is also the minimum PHP version that the Drupal and Joomla projects will be supporting in their next versions, both due out this year.

If you would like some help in upgrading your site and hosting, please let me know, very reasonable rates!

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From Linc Wonham, Website Magazine:
June Swoon Has Some Merchants Heading Back to School Early

June turned out to be a sobering month for anyone hoping for more signs of an economic recovery, and online retailers are definitely among the underwhelmed. Probably the only bright spot to the International Council of Shopping Centers’ index of retail sales was that the numbers were still considerably better than a year ago.

But the upward trend in consumer spending we’d been seeing the past few months all but halted as retail sales gained a meager 3 percent, despite the inclusion of the Memorial Day weekend in the month’s overall data [emphasis mine, Ed.]. The index reported a decline of more than 5 percent in June 2009, but merchants who were expecting June 2010 to kick off a strong summer shopping season are now left wondering if this year’s earlier consumer spending will wind up costing them down the road.

I can testify that June was not as busy for my area of the country as it was last year, and much weaker than we had anticipated and budgeted for (that is another discussion altogether). As we are located in a fairly remote, semi-rural area – the summer economy is based on tourism – unemployment is a problem. Most of the restaurants and hotels are not seeing the level of business that they would like and are holding off on hiring any additional seasonal workers.

Wonham goes on to discuss unemployment and consumer confidence as factors:

For whatever reason, most likely an unemployment rate that is still uncomfortably high, consumers have lost the confidence they exhibited into about mid-April. The retail numbers for July and August will have an enormous bearing on the economy’s overall health as merchants are still holding out hopes for an aggressive back-to-school season. Normally slated to kick off at the end of this month, many retailers will try to offset the slow June with an early jump on the back-to-school offerings.

I remain skeptical that an early “back-to-school” sale push will do much good for retailers, as the rising unemployment and falling consumer confidence trends tend to be mutually reinforcing. I have a suspicion that many businesses are waiting, holding on to any cash that they have, to see what happens between the beginning of November and mid-January 2011.

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…and it’s Big Brother coming your way: (from NoisyRoom.net)

From TorrentFreak:

After the U.S. Government took action against several sites connected to movie streaming recently, nerves are jangling over the possibility that this is just the beginning of a wider crackdown. Now it appears that a free blogging platform has been taken down by its hosting provider on orders from the U.S. authorities on grounds of “a history of abuse”. More than 73,000 blogs are out of action as a result.

Yesterday, an event took place here in the United States that got little comment – cue the crickets… WordPress host Blogetery and 73,000 WordPress blogs were shut down, marking the beginning of a modern day 1984 society in the US. A chill rippled through the blogging world and the internet sparking 1st Amendment fears and a Constitutional outcry from those paying attention.

I remarked that this was “Possibly the biggest violation of Constitutional rights I have seen in my lifetime…” I twittered, facebooked and sent this out to the largest bloggers on the web. Silence ensued, apathy reigned and a disquieting sense of despondency descended. Only The Radio Patriot commented on the fact that their Google, Blogger account just vanished some time ago and that it now feels like ‘1984‘ in the realest sense of the title.

I agree with the author, back up your sites, and have an alternate hosting plan in place.

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Terry Starbucker has posted an article on The Mid-Year Leadership Check-Up: 10 Ways To Stay On The Path To Success based on his New Year’s “checklist” of 10 things we needed to do to make it a great year.

1. Take Stock of the Victories – We started the New Year by pausing and reflecting; it’s time to once again “come up for air” from the deep dive of our busy business lives. Make sure you take a day, or even just a morning, to have an informal chat with your team to consolidate your learning from the first six months.

Mid-year is an excellent time to celebrate individual achievements. So often these victories get lost in the whirlwind of the end-of-the-year activities. They can be announced informally to everyone in your organization and have a very positive effect on morale.

2. Analyze and Absorb Your Current Position – Just like we “studied” up in January to know our business plan inside and out, we need to analyze and absorb the year-to-date operating results, so we can make meaningful comparisons (and more importantly, any mid-course corrections).

With the first half of the year behind you that means that youstill have six more months to achieve the goals that you set for yourself, your team, and your business. A short meeting with the principle players in your organization can quickly analyze areas of concern and lay out a plan for dealing with them.

3. Perform a Self-Assessment – Take a look at those “fine print” tendencies that you filed away earlier in the year – are you pushing too hard? Did you micromanage anything you should have backed away from? Or did you overcompensate and not push hard enough?

One of my favorite managers from a past job used to say, “When in doubt, ask.” Ask yourself these questions, but, more importantly, as the people that report to you. Their answers can help you develop personally and professionally as they build trust and teamwork.

Starbucker has seven more exercises for you, I recommend reading the entire article. Then put these Action Steps into your system for completion by the end of the month. You won’t regret it.

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The Right Way to Build a Personal Brand : Marketing :: American Express OPEN Forum

Looking to instantly boost your business, establish yourself as a subject matter expert or simply generate widespread awareness for your particular passion, field or cause? Here are five simple strategies that individuals and organizations alike can use to instantly set themselves apart from the pack.

1. Craft a Compelling Pitch–The first rule of personal branding: You need to be able to clearly define yourself, and sum up precisely what it is you and your business do, in 30 seconds or less (also known as the fabled “elevator pitch”). When in doubt, make a simple matrix of the skills you feel you or your business excel at, and the personal qualities and values you’re most proud of. Then create a powerful and truthful description that best connects the dots. Ask yourself: How do I see myself? Are you a “web design guru,” “leader in forensic accounting,” or “top data warehousing solutions provider?” Because that’s how most others will summarize you mentally–as a short, descriptive tag that’s lumped into a single grouping. To this extent, your pitch needs to be brief, to the point, and ensure that–as time-strapped individuals are wont to do–when you’re quickly shunted into a specific mental category, it’s the one that best matches your experience. That way, when the person in question has a need for a specific service, they know exactly whom to call. Pro tip: Rather than vying for attention in an area that’s saturated with rivals, instead strike where the competition isn’t, and pick a niche that’s clearly being underserved. That way, your voice won’t just ring out louder–its echoes will also travel further.

2. Take Control of Your Image–It can’t be stressed enough: Search engine marketing cannot be ignored. From prospective clients and business partners to job recruiters and candidates, countless professionals (all increasingly strapped for time and bandwidth) are turning to services like Google and Bing to research specific topics, service providers and potential hires in ever-growing numbers. Therefore, it’s imperative that you tap into the power of these platforms to build brand awareness and reinforce the message you’re trying to convey. As a starter exercise, try inputting your name or your business’s name in Google, and see what comes up. It’s vital that the majority of results that appear–especially the first ones that pop up, as they’re the likeliest to be clicked on–be those you want, and that all speak to the same clear message. To this extent, you should not only own a website with your personal name as the domain (www.johnsmith.com) or a simple variation thereof (www.johnjaysmith.com); you should also have profiles on all major social networking services (Facebook, Twitter, LinkedIn, Plaxo, etc.) under the same name. Also, keep in mind that virtually everything you say or do online is publicly visible and tends to linger. So always think twice before you post something dubious or upload pictures from last night’s party to your Facebook profile. If it’s not something you’d feel comfortable sharing in front of co-workers or clients at the office, it’s not something you should be projecting into cyberspace.

3. Make Your Point Heard–Many hesitate to speak up for fear of criticism or ridicule. But that’s exactly the dilemma in an era where so many are competing for so little–it’s the squeaky wheel that gets the grease. Keep in mind that at its heart, personal branding is about establishing yourself or your business as a subject matter expert that brings unique, indispensable services to the table, not just being another faceless cog in the wheel. You need to create platforms (blogs, podcasts, self-published books/magazines, online video channels, etc.) that can help broadcast your views to as many members of a specific audience as possible and galvanize support and community input around them. All of these vehicles should also be stamped with your signature name, logo, imagery and overall sensibilities. Once built, it pays to pump out content through them that illustrates your expertise as religiously as possible, whether via articles, surveys, opinions, research reports or topical analysis. Countless platforms exist to help spread the word and grow your readership or viewing audience as well, from Facebook and Twitter accounts to LinkedIn groups and custom-built, Ning-powered social networks. Alternately, you can always blog for popular outlets, submit bylined articles to trade magazines in exchange for a picture and bio, or participate as a speaker at trade events. Along the same lines, don’t hesitate to share content with or send updates to fellow subject matter experts who can help to cross-promote and generate awareness for your initiatives. Essentially, you don’t just want to be active and highly visible–you want to be a strong, stable and welcome presence everywhere your audience goes.

4. Be Generous with Your Time–Doing other professionals and business owners favors, taking the time to answer reader questions or making a point to contribute to charitable causes that benefit your field as a whole may not seem cost-effective from a monetary standpoint. But acts of kindness and generosity aren’t just good for building character. They also serve to generate goodwill and help build invaluable relationships and contacts that can pay off immeasurably in the long run. Charitable work presents great opportunities to establish trust, grow your personal/professional network and make a positive impact–you never know when it might lead to a vital mention, review or referral. And there’s no quicker way to build support for a cause or make an unexpected ally than by spending time and effort to go above and beyond the call of duty. It doesn’t just speak to personal values and work ethic. It also presents a prime opportunity to demonstrate your expertise.

5. Get Out and Mingle–Whether using blog posts, tweets, press releases, online newswires, your professional Facebook page or free services that connect experts with fans or reporters to build public and media rapport, accessibility is the name of the game. Not only do people need to know you’re out there–they also need to know where and how to reach you, that you’re available to connect as needed and will respond to requests for outreach in a timely fashion. This doesn’t mean having to broadcast your personal information to the world or staying up until 3 a.m. responding to 400 e-mails. But it does necessitate that you not build too many layers of insulation between yourself and incoming queries, and be respectful of acknowledging people’s questions and feedback (even if it’s just through a series of blog posts). The bottom line: If you want to be a go-to guy or gal, you’ve got to earn people’s trust. That means being genuine, being as good as your word and being capable of delivering high-quality work or insights on tight turnaround. It also means being willing to signal via your actions that you don’t just hear what they’re saying, but are further actively seeking out others’ opinions and assigning weight and import to both sides of the conversation.

Technology expert Scott Steinberg is the CEO of high-tech consulting firm TechSavvy Global, and a celebrated gadget guru and video game expert who frequently appears as a technology analyst on ABC, CBS, FOX, NBC and CNN, and has contributed to 400+ outlets from The New York Times to Playboy and Rolling Stone.