Attorney Dan W. Kehr, Esq. will be making a guest appearance on the Save Money San Diego Radio show broadcast THIS SATURDAY, JANUARY 23, 2010 FROM 2:00PM – 3:00PM PST.

The Federal Housing Administration (FHA) today outlined future changes to the FHA home loan program. The changes first were proposed last month by Secretary of Housing and Urban Development (HUD) Shaun Donovan.
Rising defaults on FHA loans have led to the FHA’s cash reserves falling below federally mandated levels. FHA officials hope that policy changes will ensure borrowers have a stronger equity position and are less likely to default.
Policy changes include:
• Raising the up-front mortgage insurance premium: The premium will rise to 2.25 percent from its current 1.75 percent. HUD is expected to release a Mortgagee Letter on Jan. 21 making the premium increase effective in the spring.
• Raising the minimum credit score requirements: New borrowers will be required to have a minimum FICO score of 580 to qualify for the FHA’s 3.5 percent down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10 percent. FHA expects this to take effect in early summer after it goes through the normal regulatory process.
• Reduce allowable seller concessions: The agency is lowering the maximum permissible level to 3 percent from its current 6 percent limit. FHA expects this to take effect in early summer after it goes through the normal regulatory process.

Attorney Dan W. Kehr, Esq. will be making a guest appearance on the Save Money San Diego Radio show broadcast THIS SATURDAY, JANUARY 23, 2010 AT 2:00 PM PST.

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Choosing the right business idea is the first hurdle in joining the ranks of entrepreneurship. If you aren’t sure what you want to do, but know you want the independence of owning your work life, starting your idea search with the target market makes sense. You likely are very aware of the type of people you would (and would not) like to deal with on a daily basis. Thus, developing business ideas based on who your venture will serve makes perfect sense.

As the country recovers from the current economic devastation, a few specific target markets will emerge as strong opportunities for new small businesses to tap. Five of the best of these markets are:

Senior Citizens
The over 55 population is growing fast and it is a much broader market than ever before. The 55 to 75 year old crowd is healthier and more active than previous generations. Many plan to continue working, at least part-time, and some are looking to finally pursue the work they have always dreamed of doing. They are relatively technologically savvy — a good percentage are active on the internet, own smart phones, and have played the Wii. The older portion of the senior crowd is living longer and wanting to stay in their own homes as long as possible. Opportunities abound to serve this market, from senior citizen-focused gyms to in-home, nonmedical services to temporary staffing. Be creative, talk to the seniors in your area, and scope out a few viable business ideas targeting this untapped market.

Youth
Kids and teens control the spending of enormous amounts of cash, even in this difficult economy. In addition, the typical response to a recession is to make family a higher priority, so the next years will likely see a burst in kid-focused products and services. Over 7 million high-school age kids play sports and just as many are involved in other extracurriculars. The questionable quality of the public schools across the board also provide opportunities for supplemental education businesses, such as language, arts, and technology camps or schools.

Entrepreneurs
The current economy will recover on the backs of entrepreneurs. This means that millions of Americans will be bootstrapping startups and looking for ways to outsource critical tasks. If you have a skill that new business owners might need, set yourself up as a freelancer…it’s a better deal for both parties. In addition, the lifestyle of a entrepreneur provides many business opportunities. Many will be working from home, many will be working from their cars, and all of them will need to outsource some portions of their business as they grow.

Wealthy
The rich among us are always an excellent market to serve, as long as you understand their motivations. They tend to prefer high-end, fashionable products of excellent quality. In services, they are looking for ways to free up some time and reduce their to-do lists in the most convenient manner possible. In general, the wealthy are willing to pay a premium price for quality, efficiency, and image, so be sure your company culture is developed to meet those high standards.

Foodies
The foodie community is on the rise and startups with a focus on this market have innumerable niches to choose from. From training courses to modern catering to kitchen gadgets, the field is wide open to entrepreneurs with a little knowledge and a lot of willingness.

In addition to these five growing target markets there are dozens, if not hundreds, of other groups on which to base viable business ideas. Think about who you are, who you enjoy working with, and who you best understand and relate to. From there, developing a solid startup idea is merely a matter of identifying needs within that group.

About the Author
K. MacKillop, a serial entrepreneur with a J.D. from Duke University, is co-founder of LaunchX and authors a small business startup blog.

The New Year always brings renewed optimism and intriguing opportunities for small business. After the last year or so of devastation to the economy, there are a few stark changes to be expected for small businesses and their owners. From a trend away from over-staffing to a more conscientious market, the entrepreneurs who are aware of and respond to these changes will survive and thrive in 2010.

The American workforce is in the midst of major change. Businesses are focused on improving efficiency such that the necessary functions are handled by the fewest employees possible. Professionals who are able are likely to opt for independent contractor status — working on contract rather than seeking long-term, internal jobs. Those who can’t switch to independent contractor status are likely to look for a more suitable position as the economy recovers, but then will be more likely to remain at that job than to job-hop as had become the norm over the last decade.

This is all good news for small business owners. One-off projects, like revamping a website or overhauling the accounting system, can be handled in a more cost-effective manner by utilizing independent contractors. Long-term positions, like in-house bookkeepers, sales staff, and other full-time jobs will be relatively easy to fill over the next year or so with well-qualified candidates. And, as long as the employer provides a reasonable salary and benefits, those workers are likely to stay around. Still, it will be critical for business owners to streamline their internal processes to avoid over-hiring and to be clear about the responsibilities and qualifications necessary to fill staff positions. Selecting the right job candidates the first time will be more important than ever, because once workers find a good place to land in the recovering economy they are going to be difficult to pry loose.

Another benefit of emerging from this tight job market is that wages will be corrected and the wildly out of control benefits packages are likely to be trimmed across the board. Still, savvy business owners will do their homework in setting salary ranges and offer competitive employment packages in order to take advantage of the job loyalty available from the shell-shocked workforce.

Consumer behavior has been drastically affected by the Great Recession as well. Shoppers are looking for value and bargains. Priorities have shifted internally to self and family over material accumulation. It is likely that good customer service will make a comeback, so those startups with a strong focus on taking care of their clients should do well. However, premium pricing for decent service will be difficult to sell. Consumers are looking to get back to basics, and that means good service should be standard, not a bonus.

Americans are also likely to be more wary of scams and rip-offs. While the scammers are still going strong right now, the federal government is expected to step up their pursuit of illegal “business opportunities” — these stories will get press, so more consumers will be aware of what to look for. Entrepreneurs need to be alert to the scams running within their own industry and be prepared to reassure clients that their business is legitimate.

2010 is gearing up to be a great year for small business. Times of economic recovery are historically beneficial to new business — if entrepreneurs take advantage of the efficiency and financial management lessons of the recession, they will establish themselves as the primary, if not only, source of job growth over the next decade.

About the Author
K. MacKillop, a serial entrepreneur with a J.D. from Duke University, is co-founder of LaunchX and authors a small business startup blog. The LaunchX System helps those starting a business capitalize on the new economy through extensive research and planning, attention to basics, and the tools needed to create a successful company. Visit LaunchX.com for a free Business Readiness Assessment.

It’s heartening to see encouraging signs in both the general economy and the real estate market in California. As is often the case, California is ahead of the nation in market recovery. The state’s median home price increased year over year in November for the first time since August 2007, sales bottomed out more than two years ago, and the median home price reached its trough in February 2009. Going forward, we expect the statewide median home price to rise 3.3 percent to $280,000 this year, with a slight decrease in sales. While no one has an infallible crystal ball, it looks like the worst is behind us, and we can move forward with confidence that better days are ahead.

With a new April 30 deadline in place for clients to take advantage of a federal home-buyer incentive, real estate practitioners now have slightly less than four months to get their qualified prospects under contract before the cut-off date.

In order to maximize this opportunity, it is recommended that real estate pros revamp their marketing materials to reflect changes in the rules — which now allow certain repeat buyers, as well as first-time buyers, to get a tax break.

In addition to promoting home-buying based on today’s lower home prices and historically low interest rates, it is also important for the real estate professional to convey to clients that there is no requirement that they sell their current residence at once — or ever.

On top of polishing up their marketing approach, real estate professionals should free up their time so that they are available to spend more time guiding buyers and hosting property showings.

They also must be thoroughly knowledgeable about the supply of properties priced up to $800,000, which is the maximum price for a home to qualify for the tax credit.

Finally, agents must keep all other parties involved in transactions — from lenders to inspectors — on top of things and at the ready because most motivated house-hunters will want to move quickly once they have found their ideal property.

Source: RISMedia, Margaret Kelly (01/08/10)

© Copyright 2010 Information Inc.

Attorney Dan W. Kehr, Esq. will be making a guest appearance on the Save Money San Diego Radio show broadcast on February 20, 2010 at 2:00 PM PST.

Below is a brief analysis giving further exposition on the rationale for and effect of the changes in the California Corporations Code by AB 1233:

Quorum; One Director One Vote; No Proxy Voting by Directors

Nonprofit corporations may wish to ensure that certain board actions may not be taken without the presence, at the meeting where such action is taken, of certain directors or constituencies who are on or represented on the board. Sections 5211(a)(7), 7211(a)(7), 9211(a)(7), and 12351(a)(7) did not expressly provide that the requisite quorum may require inclusion of certain specified directors. This practice is relatively common and expressly permitted in some other states. The Corporations Code should state expressly that the articles or bylaws may specify that certain directors must be present for a quorum to exist as long as that does not prevent efficient decision-making for the corporation when those directors die or the person or persons authorized to appoint or elect them have died or ceased to exist.

In addition, Sections 5211(a)(7), 7211(a)(7), 9211(a)(7), and 12351(a)(7) referred to the authorized number of directors as stated in the articles or bylaws. In many cases, the bylaws provide for a range of directors (for example from three to nine), and the authorized number is set by the board in a resolution. AB 1233 added the language “or pursuant to” before the articles or bylaws to clarify that the authorized number may be the number authorized by resolution and not the highest end of a range in the articles or bylaws.

Constituents of nonprofit corporations sometimes wish to permit certain directors to possess more than one vote. However, that is inconsistent with the Corporations Code and a director’s fiduciary duties. While the existing provisions suggested that an action or decision taken by a board of directors is determined by a headcount of directors present rather than a vote cast by them, that subtlety was not always clearly recognized by volunteers trying to manage the affairs of a corporation. This was readily clarified. In addition, although the code did not expressly forbid a director from participating in a decision by proxy, this restriction was made clear as such volunteers may not recognize the risk of that being inconsistent with fiduciary duties. AB 1233 added a new subdivision (c) to Sections 5211, 7211, 9211, and 12351 to state that each director has only one vote and no director may vote by proxy.