Category Archives: Taxes

CHICAGO—THE BEST INCUBATOR IN AMERICA?

by Denny O’Malley

Recently, Inc.com published an article about the best cities for early-stage companies. The premise: Chicago is the surprise winner.

Why would that be? San Francisco and New York are both beautiful, thriving cities that dramatically represent the diversity of American ideas. San Fran—younger, more venture-oriented, with beautiful natural vistas. New York—the classic, bustling private and public equity concrete jungle.

What do they have in common? It costs a kidney to pay rent for a closet. Continue reading

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HEART OF GOLD

Heart of Gold TJohn Jonelis – I knew something outstanding was going on, but when a friend raved about it, I had to stop procrastinating and find out more.

Shalom Klein founded and runs the JB2BN, which is a really cool acronym for the Jewish Business to Business Network. To gain an interview, I had to schedule a time slot. Shalom runs his entire day by increments. No wasted minutes. And I asked myself—what motivates him to work so hard helping others? 24-year-olds usually spend their time in more self-centered pursuits.

Shalom Klein - JB2BN

Shalom Klein – JB2BN

Q&A

Q – How did you go from an idea to the large organization you have today?

A – We have an accounting firm focused on small business. That led me into the world of networking, Chambers of Commerce, and meeting people.

In June of 2010, I did a lunch for our contacts. If you think about it, a photographer needs to meet a lawyer who needs to meet an accountant. Seventy people showed up.

So the next day, I walked into a Starbucks and saw five meetings going on from the day prior. I knew we were onto something BIG.

Now, many thousands of people are involved in the JB2BN. Upwards of 15,000 people have come out of our programs so far. JB2BN logo

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5,000 People

My goal is not that everybody attend every event. Most of ours draw 75-100 people—small business owners, job seekers. It’s about meeting people—developing relationships that are the key to helping our community.

But we offer some pretty outrageous things, like The Business Event—an free annual expo. This year, 5,000 people showed up.

Q – Give me a picture of it.

A – I have to keep this a little bit brief because I have somebody calling me in a few minutes.

  1. A Business Expo, which I believe is the largest one around the Midwest.
  2. A Job Fair with 30 employers that are hiring on the spot.
  3. 3 workshops going on simultaneously at the top of every hour.
  4. A total of 18 workshops during the day.

Q – What kind of workshops?

A Marketing, networking, resumes, interviewing, cover letters, speed networking, LinkedIn, everything under the sun. They’re all posted on our website.

There’s a free employment clinic running at all times. The workshops, include some very prominent speakers.

Q – How did you find a venue for 5,000 people?

A – It’s been a work in progress. The first year we did it at the Holiday Inn in Skokie. We had 2,500 people. I called all the neighborhood businesses to tell them, “Hey, we’re not-for-profit. Please don’t tow our cars.” We clearly outgrew that space.

The next year we did it at a mall. I figured malls have a lot of parking space. So I partnered with the mayor of the Village of Lincolnwood. He said, “I’ll set you up in the town center.” And sure enough, he did. And it was a great, great event but we quickly outgrew the space. We even arranged a shuttle bus that ran from the mall to another venue for workshops.

The mayor of Evanston was on my case saying, “How can we get something like this here in town?” I said, “Hey, find me a space and I’ll do it.” They got me Evanston High School, which is a gorgeous facility, a huge facility, and they have a brand new field house. It worked out fantastic. We actually ran out of parking half way through the day.

I’m gonna have to start working on next year’s event. But it’s a good problem to have. I’m beyond thrilled with the outcomes, with the progress that we’ve made and I’m looking forward to next steps.

JB2BN Telephone

Q – How big can it grow?

A – What we’ve been doing has attracted a lot of attention. I’m very proud of the successes. The numbers are important but the outcomes are far more important. The one thing everybody shares is the need to put food on the table.

And the reason any organization goes viral is that you’re talking about the right issue at the right time. I hear success stories every day. I meet people who have found jobs. I hear of people who are now working together simply because we connected the dots!

We don’t spend a penny on advertising. We don’t do any marketing. People come to us. WLS Radio, 890 and 94.7 approached me about partnering on this year’s event. They came to the event and promoted it for free through their vast media channels. We’re a grass roots community organization. It’s my goal to continue to grow and develop that way.

Q – Will you expand to other cities?

A We already have. We’re running events in Milwaukee, Detroit, and St. Louis. Cleveland is inquiring. My goal is to expand around the Midwest—not nationwide. There are so many businesses synergies that should meet.

Q – So you send other point-people out to do the logistics at those locations?

A We’ve got a good committee of people who are helping to promote the event and work on the logistics but I try to be in as many places as I can.

Shalom_Klein JB2BN

Shalom_Klein JB2BN

Q – How do you find time for all of that?

A – My other passion is time management. Every minute of my day is occupied in some way, which is why I’m so careful about scheduling these calls and giving everyone my full attention. I even schedule picking up my dry cleaning. I have all the events on the calendar. It’s an important thing to me. This is a passion. You probably hear that in my voice.

Q – Yeah. I really do.

A – I’m also chairman of the Skokie Economic Development Commission. I’m very involved in attracting businesses to our area. I started the Dempster Street Merchants Association. I was appointed by the mayor and I’m very involved in that effort. You make time. The busy people only get busier, right?

Q – And they’re the ones you go to when you need to get something done. How much more time do you have left for me?

A – Another ten, fifteen minutes.

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The How To

Q – How do you launch a first-time event?

A We had one this morning at a place called The Plugin Workspace. It’s an incubator for startup businesses in Highland Park. This morning’s event was called, “Networking and Coffee,” and it was just that.

One of our members said, “I’ve been coming to your events. How can I put on one?” I said, “Easy. Open up your space and provide some kosher refreshments.” And sure enough, that’s what he did. And we had something like fifty people who came out in the awful weather to mingle.

Q – What does your event schedule look like?

A – We do three events a week—

  • One dedicated to jobs
  • One business
  • One education

And by we, I don’t just mean me. I mean people who volunteer—people who dedicate their time, talent, and energies to making this organization a success. We don’t have any paid staff people at all.

Q – Tell me about the job program.

A – It’s both networking and education. Job clinics. Career counselors offer free support and training in all sorts of skills that help people find jobs.

It’s about people meeting each other, but I believe equally in getting people the information and resources they need so they can have a productive job search.

Job Board on JB2BN Website

Job Board on JB2BN Website

Q – Who’s your target audience for education?

A – Both businesses and job seekers. Everybody needs information and education. These days you can’t find a job without being expert in Microsoft Office—Excel, Word, PowerPoint, and skills like that. We have volunteers that come in and teach classes.

If someone owns a business and wants to brush up on their skills or if somebody’s in transition and wants to become more polished, we have classes for them. We offer workshops on how to build a free website in WordPress. One on how to use Google Apps to create an email account for yourself. Very basic skills, but skills that are key, whether you need a job or own a business and just want to become better at what you do.

Q – By the very name of your organization, you’re up-front that it’s a Jewish group. Do you have to be Jewish to come?

A – No. Growing up as a kid I learned that the highest form of charity is helping somebody earn their own livelihood. I try to practice that. So the organization is open to everyone regardless of walks of life, politics, or religion and I’m very proud of that identity but it’s a question I get all the time.

Q – How do you make a living out of this?

A –I don’t. That’s never been my goal. Not my plan at all. My hope is that God continues to give me the strength to wear two hats—run and grow our family business and continue to build the organization. The organization is not intended to be monetized in any way. It should help people. That’s my goal.

Q –How does the JB2BN self-sustain?

A – Grass roots. It’s always been my dream to build an organization that’s driven, not by paid staff, but by people that step up to the plate. Last week’s events with so many thousands of people, we needed the support to greet people, register, check people in, and run the events. When I issued a call to action to my organization, 35 people volunteered. They manned the registration tables, greeted the visitors, and made sure everybody knew where they were going. When we want to put on an event and need a host, people step up to the plate.

So I only take credit for setting up the coffee and the cake at some of our events.

Q – It doesn’t sound that way to me. Sounds like a lot of logistics.

A Well, occasionally it’s a little bit of logistics but it comes together really, really nicely. We have a few businesses that step up to the plate. They provide sponsorships to cover the minimal costs of running the organization and allowing us to grow.

It’s all-important stuff. Things that I’m quite passionate about. It’s a pleasure to do it. I hope you’ll be able to come out to one of these events. I always want more people involved.

Q – I’d like that. On your website, you show a picture of a child’s string telephone. What’s with that?

A (He laughs.) Here’s what it means: “It doesn’t matter how far technology or social media has developed—you have to get out there and network!”

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Links

Jewish B2B Network website 

The Business Event website

Video on The Business Event by WLS:

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Photography and video courtesy JB2BN and WLS.

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Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2013 John Jonelis – All Rights Reserved

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THE CLIFFS OF INSANITY

Seven Solutions

VERBATIM – From storied business consultant, J. P. Pierogiczikowski—affectionately known as Joe Perogi,

as told to John Jonelis

Cliffs of InsanityJoe Perogi here. I’m listening to Peter Orszag speaking real clear on The Fiscal Cliff. He comes all da way from Manhattan to give this great talk to us at The Chicago Council on Global Affairs.

This guy’s real smart. Sure, he’s way left o’ my way o’ thinking but he’s got alotta ideas,  Ideas make money move. And he understands the politics as well as the economics – a rare combination.  So after the talk, I read a buncha his articles, put it all together, and here’s what I come up with:Chicago Council on Global Affairs Logo

He says $750 billion per year of income is already vaporized. That’s right—it’s down da tubes fer good. He says it’s as bad as the dot com bust but get this—this time we’re not bouncing back so fast.

Peter Orszag - Bloomberg

Peter Orszag – Bloomberg

Private lending is zilch. And the jobs are just gone. We lost workers permanently. Lotsa skills become obsolete. People give up.

Here’s something new to me: This mess has been going on long enough that disability benefits are rising. And as Orszag puts it, “Once people get on disability, they don’t go off.” While all this is goin’ on, global labor supply quadruples. So no wonder you can’t find a job.

According to Orszag: “People can sense that all this is happening and that nothing is being done to fill that $750B hole. They’re right.”

Bridge Out Ahead!

Now take that same broken-down train and drive it off the Fiscal Cliff. More than $600 Billion in tax increases and spending cuts by the end of 2012. We’re talkin’ a train wreck of epic proportions on a national scale. Probably push Europe over the edge too.

Budget Elements - American Enterprise Institute

American Enterprise Institute

A Little Comic Relief

It’s times like these we gotta keep our sense of humor.  Orszag cites some stats from his Bloomberg column and that takes my mind back to just before the talk. I actually watch Orszag post that article while we’re sitting together in da coffee shop. And I have some fun with that. My old friend, Ethan Sobriety invited me to this shindig and I get here earlier than he does. So I introduce Orszag to him and Ethan almost throws a coronary. Orszag was Obama’s top dog in Management and Budget and the Congressional Budget Office. But he goes back further. Senior economist under Clinton’s Council of Economic Advisors and the National Economic Council.  These days he’s bigtime at Citigroup.Bloomberg Logo

My friend Ethan ain’t no slouch neither. International currency investor who makes a home in England, Asia, Africa, and right here in Chicago, but when the color comes back to his face he says hello to Dr. Orszag and shakes his hand. From his reaction I figure Ethan’s got a whole lot of respect for this guy.

Posting Article

Orszag Posting His Article

Whacha Gonna Do?

But Orszag is still speaking and I snap my attention back to what’s going on now, right in front of me.  He asks, “Will we shoot ourselves in the foot again?”  He says we’re doing stimulus the wrong way. “We need to do specific, gradual, policy that’s hard to reverse over time.” Gradual and irreversible makes for stability. That way business knows what’s gonna happen and has plenty of time to plan for it. Lending opens up. Da economy starts workin’ again. So are we doin’ that?  No, he says, “We’re doing the opposite.” Not good.

Anybody’d think them bums in the White House, the Senate, and the House of Reps could work this thing out. But Orszag shows two simple charts that explain why it’s so hard to fix. The first one explains the way Left and Right thinking used to overlap. All the deals get done in that overlap area. (This guy’s an economist and uses bell curves to make his point. Ethan tells me Venn diagrams might make more sense to most people, so I’m giving you that version.) Here’s the way it looked in the ‘60s:

VENN 1

Now let’s fast forward to today. You see it? There’s no overlap at all no more. No consensus. Maybe no deal.

VENN 2

Polarization

Some say polarization is the natural result of gerrymandering and Orszag says that might be as much as 15% of it. But he thinks it’s driven by the polarization of the population itself. We’re doing it to ourselves,” he says. Then he explains how:

  • If you put like-minded people in a group, the group becomes more extreme. That rings true to me. It’s plain common sense.
  • Landslide elections in voting districts are getting a whole lot bigger. Lotsa candidates run unopposed or with token opposition. That means our neighbors are more like us. Again, more like-minded equals more extreme.
  • Nowadays we can all pick our own reality. Each of us can select our own news feeds and the like. Orszag talks about how he “unfollowed” a Twitter user who criticized him. So now that person is still criticizing him, but it’s not in Orszag’s world no more, so it’s got no impact on his decisions. Again, if you listen only to like-minded people, you get more extreme.

The Positions

So here are the positions on da Left and da Right:

  • DA LEFT—Let the Tax Cuts Expire for the Rich– This is the plan to tax the $250K+ crowd. Problem is, it really doesn’t raise much money and it kills jobs.
  • DA RIGHT—Entitlement Reform – Everbody agrees we gotta do this, but gimme a break. If the country was ready to bite da bullet, Obama wouldn’t be in the White House again.

If there’s no deal, we go over The Cliffs of Insanity and da country goes into another Great Depression.

The Cliffs of Insanity from The Princess Bride - Wikipedia

The Cliffs of Insanity from The Princess Bride – Wikipedia

Seven Solutions

Even with no consensus, Orszag sees a number of possiblities:

  • Two-Stage Agreement – A 9-month temporary deal to give the bums in Washington time to work it all out. This is one of the president’s proposals.  Give him what he wants now and he’ll talk about the rest later.  But Orszag asks a good question: “If either side gives in now, why believe the other party will change later?”  So nobody budges. 
  • Tax Reform Refund – Let the tax cuts expire.  Replace them with a $1,600/year tax refund.  Do that till a deal is reached or the economy recovers. This way negotiators start with a clean slate. Both sides might find it easier to swallow. This is one of Orszag’s interesting ideas.  Maybe it works. I dunno.
  • Cut Spending – Orszag points out spending cuts are easy to say but hard to do. The more vague the proposal, the more popular it is and the more useless. When he was in government service, he’d give out a list of tax cuts but nobody could agree on anything significant.  But we gotta cut spending somehow.
  • The 50K Limit – If we limit itemized deductions to $50,000 for everybody, we can raise the same $700 Billion we’d get from taxing the job creators. But 90% of that is deductions from just three things: local taxes, home mortgage interest, and charitable contributions. Of those three, charity is the only one a taxpayer can do anything about. So charities would get clobbered. Not a good thing.
  • Raise the ThresholdExtend the tax cuts for everybody under $1 Million insteada chopping it off at $250K. So far nobody’s hot on this, but who knows? It’s the natural place to reach a compromise.  And as I see it, anybody earning $1M is likely to be runnin’ a corporation, not a mom and pop proprietorship or LLC. Regular corporations are taxed separate from personal income so I figure it shouldn’t oughta hurt jobs too much. But taxing corporations hasta raise prices. We all pay fer it, so either it’s a hidden tax or it’s inflationary.  I think one ‘o these days we’re finally gonna see summore inflation.
  • Scale Back Tax Breaks – Don’t raise rates at all. Chop off deductions the $250K-and-up earners. House Republicans might bite. But the White House hasta make a concession here and this commander in chief hasn’t shown any ability in the art of compromise. Also, the downside is this could hurt any housing recovery big time.
  • Social Security Reform – Orszag is big on this one and it’s real interesting stuff: Lift the $110,000 cap on payroll taxes. He says Democrats will leap at the chance to make Social Security solvent without private accounts. And, this one’s stable ‘cause it can be done in an orderly manner over several years. Again, he’s big on a plan that can’t be reversed and phases in over time. That means everybody knows what’s coming and has time to plan for it.

O’course, we can always kick the can down da road again like Obama did last term.  Orszag don’t raise this issue ’cause it ain’t a permanent fix.  We got a looming debt crisis and it’s only getting a whole lot worse.  

Optimism

Orszag sees some good coming in spite of all this suffering:

  • He sees shale gas and shale oil and a pipeline from North Dakota to Texas because there’s no way around it. So oil prices will eventually plummet.
  • He seems to like the way healthcare is headed because he likes defined contribution and national healthcare. Well, I figure ya gotta make allowances for people’s opinions.
  • He says there’s a lot more to come from the tech revolution.

At least that last one’s for sure.  I hope them bums figure this mess out before New Years Day.  And thanks Ethan for the great invite.  This was worth da trip.

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GO TO – THE FISCAL CLIFF – A SURPRISINGLY SIMPLE STORY

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts in full or in part accompanied by attribution and a web link are welcomed and encouraged. This is not investment advice.  I do not guarantee accuracy.   It’s not my fault if you lose money.

.Copyright © 2012 John Jonelis – All Rights Reserved

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Filed under Chicago Council on Global Affairs, Chicago Venture Magazine, CORE Insight Story, Economics, Entrepreneurship and Politics, Fiscal Policy, Innovation and Culture, Taxes