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May 24, 2013

Do I need permission to forward an email?

August 24, 2012 By biz_admin Leave a Comment

” height=”260″ />A. Forwarding an email without the permission of the sender can involve a number of ethical problems related to revealing information transmitted in confidence.

One specific Jewish stricture “forwards” run afoul of is the famous “ban” of Rabbenu Gershom, who was a leading Rabbinic leader in 10th century Germany. Among the many decrees he instituted is one on reading the private letters of other people. To this day many people passing notes or letters remind others of their desire for privacy by writing the Hebrew acronym “CDRG”: Cherem deRabbeinu Gershom (Rabbi Gershom’s ban).

Another source is the following passage from the Talmud:

Rabba stated: From where do we learn that if someone says something to his fellow, it is forbidden to reveal it until he tells him “say”? As it is written (Leviticus 1:1): “And the Lord spoke to him in the Tent of Meeting, to say.”
While grammarians generally interpret the Hebrew expression “to say” as the equivalent of quotation marks, introducing an exact citation, the rabbinical tradition is that this expression means that the speaker (usually God) is telling the listener (usually Moses) to say something: either to pass along His words or to bring Him the reply of the listeners. We can infer that without explicit authorization, one should generally refrain from passing on private communications.

As some commentators point out, this explanation is a bit cryptic in reference to this particular verse, for the very next verse states explicitly: “Speak to the children of Israel, and say to them . . .” So even without the addition “to say” Moses would certainly know that he has to repeat God’s command!

Perhaps we can resolve this paradox. There are two different levels of transmission. One is to summarize and reword the message the listener received. This is a less intrusive kind of revelation, for two reasons: one reason is that less information is revealed, and the other is that the exact words aren’t mentioned so that the original speaker is not so pinned down; he maintains a degree of “plausible deniability.” For example, he can claim that he was misunderstood, taken out of context and so on.

When God tells Moses to speak to the children of Israel and transmit the commandments relating to the sacrifices, Moses can fulfill this by summarizing or paraphrasing the original prophecy. (Our tradition states that the prophecy of Moses, unlike that of the other prophets, took the form of

exact words, not merely of visions then expressed in the particular speaking style of the prophet.) The additional words “to say” create a mandate to transmit God’s exact words. (This explanation harmonizes the traditional understanding of the expression “to say” and the grammatical one.)
From this we can learn that even if someone might not mind having his message transmitted to someone else “in the loop,” he or she might still object to having the exact words of the original email sent ahead.

The moral of the story is that we should be very careful not to forward emails unless we are sure the sender approves. Even when it is clearly appropriate to transmit the message to others, consider if it may not be sufficient to provide a brief summary of the sender’s words, rather than just forwarding the exact words. Likewise, even when forwarding someone’s exact words, don’t forward the whole letter if the really relevant section is brief.

—
The Jewish Ethicist is a joint project of Aish.com and the Business Ethics Center of Jerusalem and is reprinted with permission. To find out more about business ethics and Jewish values for the workplace, visit the Business Ethics Center

of Jerusalem at www.besr.org

Filed Under: Business and Employment Updates

Growth for Second Half of 2012 Continues

August 15, 2012 By biz_admin Leave a Comment

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casting-300×225.jpg” alt=”" width=”300″ height=”225″ />According to a Staples, Inc. survey, many small business owners are feeling more confident with the coming election. More than half (55 percent) expect business to continue growing over the rest of the year. Approximately 70 percent report they are positioning themselves for growth, and nearly 40 percent are increasing marketing communications.
In another positive indicator, a majority of owners feel comfortable leaving the office for vacation. Almost 89 percent are getting away this year instead of “staycation” at home. More than half are planning to use laptops or other electronic devices to stay connected.
According to the Kiplinger newsletter, growth will improve slightly in the second half of this year, as job creation picks up.

Without a major financial crisis or new conflict in the Middle East, the U.S. economy should continue growing slowly this year and a bit
faster in 2013. Small business owners expect expanding sales and increased hiring later in the year.
• The Department of Commerce expects about 2 million new jobs this year, an average of 165,000 a month through 2012. Unemployment, now

8.2%, will likely end the year near 8%. The GDP needs to cialis online pharmacy grow at least 2.5% a year to work down the ranks of the
unemployed.
• The Department of Labor states that the low interest rates will continue until the end of the year, then rise about half a percentage point in 2013. Mortgage rates will rise due to a modest recovery in the housing market, as demand for new home loans increases later this year.
• Consumer prices will increase 2% this year. With oil prices likely to rebound this fall, a slightly higher pace of inflation in the second half of the year is expected.
• The 0.3% fall in the Consumer Price Index in May – the first monthly drop in two years — was due entirelyto lower energy prices. Gasoline prices sank 6.8% during that month, and all energy was down 4.3%.
Excluding energy prices, consumers paid more for rent, autos, health care and clothing.
• Apparel prices are expected to increase by 4%, and food prices by about 3%. Price hikes will be modest for most groceries in 2012, except for peanut butter — up 30% after a poor peanut harvest in 2011.
• The housing industry will add to economic growth this year for the first time since the housing bubble
burst in 2006. Demand is concentrated among first time buyers and investors. Homeowners looking to trade up or downsize are
staying out of the market, waiting for higher prices before selling a current home, especially if it’s worth less than the mortgage. That’s limiting housing supply in some areas and nudging up prices in others. In a Bank of America Small Business Owner Report, 69% of Chicago small business owners cite Chicago’s local economy as important to the success of their business. And 37 percent are confident the local economy will improve over the next 12 months.

Filed Under: Business and Employment Updates

Do I have to pay someone who did work for me as part of the interview process?

October 5, 2011 By biz_admin Leave a Comment

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/300×215-150×150.jpg” alt=”" width=”150″ height=”150″ />Q: Do I have to pay someone who did work for me as part of the interview process?

A. Paying workers fully and promptly is a high priority in Jewish tradition. A number of Torah verses warn us about this. Here is a verse from the book of Leviticus (19:13):

Do not [unjustly] withhold that which is due your neighbor. Do not let a worker’s wages remain with you overnight until morning.

Or, a passage from the book of Deuteronomy (24:14-15):

Do not withhold the wages due to your poor or destitute hired hand, whether he is one of your brethren or a proselyte living in a settlement in your land. You must give him his wage on the day it is due, and not let the sun set with him waiting for it. Since he is a poor man, and his life depends on it, do not let him call out to God, causing you to have a sin.

Of course, these passages cannot tell us when in fact the worker is due his wages in the first place. But there can also be an obligation to pay someone, which doesn’t stem from agreement at all. The benefit provided by the worker’s actions can itself obligate payment.

When there is no agreement, but there is a benefit provided, the beneficiary is required to pay some reasonable approximation of the value of the benefit. (In the common law system, this corresponds roughly to the doctrine of “unjust enrichment”.)

Even if you never offered to pay your workers, they would have a justified expectation of getting paid the going wage for their work. Given that the benefit provided is itself a source of obligation, even a simple disclaimer (“I’m not offering any payment”) would probably not be enough. That would be enough to negate any wage agreement, but not to negate any benefit. Obviously any benefit can be waived, but a rather detailed waiver would be called for in this case.

Furthermore, in light of the underlying law, it would seem that the arrangement you describe is not fair. Your criterion for payment is totally subjective – whether you want to keep the person on; it is not directly dependent on whether the person does a good job or not.

SOURCES: (1)Babylonian Talmud Bava Metzia 83a (2) Babylonian Talmud Bava Metzia 101a

—

The Jewish Ethicist is a joint project of Aish.com and the Business Ethics Center of Jerusalem and is reprinted with permission. To find out more about business ethics and Jewish values for the workplace, visit www.besr.org

Filed Under: Business News

Small Business Forecast – July 2011

July 14, 2011 By biz_admin

Here is the most recent data released by the Federal Reserve regarding economic conditions in

the Seventh Federal Reserve District – Chicago.

Consumer spending. Retailers reported flat sales. Higher food and energy prices caused

consumers to make fewer shopping trips and purchase fewer discretionary items.

Auto sales edged up, as higher demand for passenger cars offset a slight decline in trucks and

SUV sales. Auto dealers reported that inventory levels of small passenger cars were

impacted due to high demand for fuel efficient vehicles and production disruptions in Japan.

Dealers of Japanese vehicles expect that supply problems will continue to have an effect

the remainder of the year.

Business spending. Contacts indicated that capital expenditures were proceeding,

with some manufacturers reporting a slight increase in capacity. Labor market conditions

improved with continued strength in manufacturing, where contacts again cited a

shortage of qualified applicants for highly skilled trades. A large staffing firm reported that

billable hours ticked up and permanent placement activity increased. However,

demand for temporary workers softened in some industries, such as finance.

Construction/real estate. Single-family home construction was constrained by distressed

properties in the resale market. However, existing home sales picked up, lowering the

ventory of unsold homes. In the multifamily sector, residential rents rose further, and credit

has become increasingly more available for the purchase of apartment buildings.

Banking/finance. Corporate funding costs in the District decreased, and contacts noted that

corporate credit market liquidity remains ample. Banking contacts reported an increase

in business loan demand. Although much of this involved refinancing of existing debt,

contacts noted they were seeing more new commercial and industrial loans in the pipeline. Credit

availability, however, remained an issue for small business borrowers. Larger banks have

recently returned to small business lending, but community banks who have traditionally

serviced this segment remain impaired.

Prices/costs. Food and energy prices ended mostly lower, as did prices for steel, copper,

and other industrial metals. Despite the recent declines, commodity prices remain elevated, and

surcharges for fuel and metals increased significantly. Retailers reported they were unable to

pass along recent increase in wholesale prices, trying to compensate for higher commodity costs

by increasing promotions and discounts. Retail contacts also noted that margins were tight,

particularly for grocery stores, and further cost increases would likely be passed along.

Based upon this information, we recommend small businesses plan for moderate

improvement. Expect nonstop pressure by consumers to find the “best buy” which could

result in profit margin challenges.

Filed Under: Business News Tagged With: Business, Economy, Employment, Jobs, Klein, Schakowsky

Protecting Your Small Business from the Impact of Inflation

June 2, 2011 By biz_admin

The signs of inflation are everywhere. Rising oil prices on the open market have brought the cost of a gallon of gas to over $5.00 in certain cities for diesel and premium unleaded. Food costs are skyrocketing and gold and other precious metals are at historical highs with no real sign of let up in sight.

Ben Bernanke, Chairman of the Federal Reserve isn’t worried about inflation. Over the past year, the consumer price index rose 2.7 percent; six months earlier, the year-over-year gain was only 1.2 percent. Bernanke blames higher oil and food prices, reflecting temporary factors (the war in Libya, poor harvests) that may be reversed. The danger of an inflationary wage-price spiral goes this argument, is negligible because unemployment is high and pay is stagnant.

Paul Ryan, a Republican from Wisconsin who heads the House Budget Committee, has been a vocal opponent of the Fed's recent stimulus policy, which pumped $600 billion into the economy through purchases of long-term Treasuries. He said he fears the policy, known as quantitative easing, will cause inflation to accelerate rapidly, forming asset bubbles and crushing the dollar. “There is nothing more insidious that a country can do to its citizens than debase its currency,” Ryan said.

If this trend continues, it could boost your small business's costs and squeeze its margins. Now is the time to begin to address the threat of higher inflation and to develop strategies to protect your business's bottom line. Here are some ways small businesses can fight inflation.

Become an expert

“trader” and use your business savvy to lock in the price of products and materials that you business uses regularly by signing long term contracts where possible. Lock in the price now before the value of your dollar goes down and the cost of materials goes up. This goes for your office or store lease as well.

Focus on profit margin. Look very carefully at the cost of doing business and eliminate / reduce operating costs where possible. Sever relationships with low margin or negative margin customers and use the resources that you have to grow business with higher margin accounts. This is an excellent hedge against inflation.

Small businesses are always tight on cash flow. And if their inputs of raw materials and other direct operating expenses go up, they may not be able to pass along these costs quickly enough to keep their cash flow positive. Managing cash flow is only one issue for small business owners.

Raising prices is a difficult process for many as well. Every increase potentially makes a business less competitive, and raises the possibility that customers might go elsewhere. Since everyone will be experiencing inflation if it happens, small businesses will have a little more room to raise prices than they are used to.

Since so many people are unemployed, the power of the consumer to absorb the price increases remains constrained. Prices may go up but if people aren’t working and the value of the consumers residential real estate continues to decline despite the value of other commodities going up, we will likely see two unconnected forces in our economy interacting and causing difficult circumstances for the small business owner.

Even when the economy seems confusing and more challenging than ever, there are many things that we can do to combat its effects. Knowing how to predict economic change is a very important financial tool.

Filed Under: Business News

Some Basic Principles of Jewish Business Ethics

June 1, 2011 By biz_admin

by Rabbi David Golinkin

In the United States, 2002 was the “year of the corporate scandal.” From Enron to Andersen, from Worldcom to Adelphia, CEOs have robbed their companies of millions while leaving their workers penniless and unemployed. These unfortunate events provide us with an opportunity to outline some of the basic principles of Jewish business ethics.

It is no secret that the world of business presents both business people and laypeople with many ethical dilemmas and challenges. As our Sages said: “Character is tested through business” (Avot D’rabi Natan, ed. Schechter, version B, Chap. 31, p. 68) while the Mekhilta teaches (Vayassa, ed. Lauterbach, vol. 2, p. 96): “ ‘If you will heed the Lord diligently, doing what is right in His eyes’ (Exodus 15:26) – this refers to business dealings. This teaches us that whoever trades in good faith… it is accounted to him as though he had observed the entire Torah.”

Our Sages, however, never limited themselves to aggadic statements in pious language about ideal utopias. They insisted on spelling out concrete laws and legal principles by which to govern our everyday lives. The following principles of Jewish business ethics will help teach us what pitfalls to avoid and what standards to strive for throughout the year.

Ona’at mamon (monetary deception)

This concept is based on a verse in the book of Vayikra (25:14): “When you sell anything to your neighbor or buy anything from your neighbor, you shall not deceive one another.”

The rabbis of the Talmud used this verse as a basis for a series of specific laws on the subject of monetary deception (Bava Metzia 49b and 50b; Rambam, Mekhira, Chapter 12). They ruled that if the price charged was more than one sixth above the accepted price, the sale is null and void and the seller must return thebuyer’s money, whil

e if it was less than a sixth, the transaction is valid and no money need be returned. Needless to say, these laws are relevant today. It is permissible for a Jew to make a fair profit; it is not permissible to price gouge and rob the customer blind.

Ona’at devarim (verbal deception)

This teaching is based on another verse in the same chapter of Vayikra (25:17): “Do not deceive one another, but fear your God, for I the Lord am your God.” Since the verse cited above had explicitly mentioned monetary deception, the rabbis concluded that this verse refers to verbal deception. Thus we learn in the Mishnah (Bava Metzia 4:10): “Just as there is deception in buying and selling, there is deception in words. A person should not say to a merchant: ‘How much does this cost?’ if he has no intention of buying it.”

Let us say that Reuven goes into a warehouse outlet in order to buy a computer, but he wants a demonstration before he spends $1000. The warehouse outlet is not equipped for demonstrations. The salesman says to Reuven: “Go to the IBM showroom down the block and ask for a demonstration, then come back here and buy the computer at our low, low price.” Reuven complies and gets a free demonstration plus a discount.

When Reuven asks for the demonstration at the IBM store, he has absolutely no intention of purchasing the computer there. He merely wants a free demonstration. The IBM salesman is being deceived. He either loses a real customer while waiting on Reuven, or feels badly when Reuven walks out on him after a half-hour demonstration. This is ona’at devarim, verbal deception.

We should take to heart the words of Rav Nachman of Kossover, as we read: “He taught that we should always have the Lord in our thoughts. He was asked: ‘Can we think of the Lord when we are engaged in buying and selling?’ ‘Surely we can,’ answered the Rabbi. ‘If we are able to think of business when we are praying, we should be able to think of praying when we are doing business’” (Louis Newman, The Hasidic Anthology, p. 343).

—

Reprinted with permission from MyJewishLearning.com

Filed Under: Business News

Can I Take Advantage of Someone Else’s Mistake?

May 1, 2011 By biz_admin

Is it ethical to take advantage of someone else’s mistake in

business? Jewish law on this question really falls into three

categories:

• When the benefit is something that both parties have equal rights

to. In this case there is no problem taking advantage of someone

else’s carelessness to obtain something that I have every right

to—as long as I don’t actually deceive them.

• When the benefit is at the expense of the mistaken individual.

Jewish law does not allow us to benefit from someone’s mistake

in order to obtain his or her property or private information.

• When the benefit is in the framework of negotiations, we have

an intermediate situation. All negotiations involve give and take

that, in some sense, are at the expense of one side or the other. In

this case it is forbidden to deceive the other side, but permissible

to negotiate an advantageous deal.

The most interesting case is that of negotiations. The ethics of

negotiations is an underdeveloped area of ethics generally,

because negotiations are a paradoxical interaction. Negotiations

receive their validity from consent and agreement, yet the very

nature of negotiations is uncertainty as to what the other side

really is willing to pay or how much they are really willing to

give up. A certain amount of hidden information is natural. At

the same time, if the sides are totally deceitful then no effective

negotiations can ever take place. So negotiations take place in the

gray area where each side is obligated to “reveal one handbre

adth

and hide two.”

Mistakes in negotiations are common. One common mistake is

accidentally revealing confidential information, but on the other

hand occasionally you get away with this because the other side

assumes it must be just a ploy. More to the point, sometimes

one side fails to notice a very detrimental clause in a contract;

sometimes a side may even carelessly submit a contract proposal

that is to its own disadvantage.

The Talmud discusses a similar case and concludes that the

appropriate response is to draw the other side’s attention to the

agreement as a whole. A merchant offered Rav Kahana an unusual

bargain, which created the suspicion of a mistake; Rav Kahana

stated pointedly, “I’m relying on your calculation.” Likewise, in

a bargaining situation a person could assert: “We’re responding

to your conditions.” Your job does include making sure that the

other side understands exactly what conditions they are agreeing

to, but it is not your responsibility to ensure that these conditions

are to their advantage.

The best course of action when presented with a seeming misstep

in a negotiating situation is neither to aggressively seize the

opportunity nor to meekly yield on your vital interests. Rather,

you should ask the other side to re-examine the offer and confirm

that they understand all the conditions and are willing to go ahead.

—-

Republished in a condensed form with permission from the Business

Ethics Center of Jerusalem (www.besr.org).

Filed Under: Business News

Jewish Ethics Demand That We Pay Taxes

April 3, 2011 By biz_admin

By Rabbi Asher Meir

One of the more onerous obligations we face as citizens is the requirement to pay taxes. By the time we are done with federal taxes, state taxes, property taxes, sales taxes, Social Security, user and license fees and so on, a pretty substantial chunk of our income finds its way to the government. It is hardly surprising that citizens are always looking for ways to minimize their tax burden.

At the same time, today’s citizen is, to an unprecedented extent, the beneficiary of government expenditures. In most advanced countries, we take for granted an extensive system of roads and highways, an efficient legal system, well-planned neighborhoods with sidewalks and green spaces, national defense which gives most people lifetime security, an impressive level of public school education and generous retirement benefits.

Enjoyment of these benefits implies an ethical obligation to be fair dealers in the tax arena. We are entitled to minimize our tax burden,

but we must not engage in or abet tax evasion.

An instructive passage in the Talmud teaches us about the important relationship between the general obligation to obey legitimate laws

and the special legitimacy of taxes that are used for our benefit. “Samuel stated, ‘The law of the land is the law,’ Rava said.

‘Observe that this must be true. For [the government] fells trees and builds bridges, and we cross them.’” The passage suggests that if it were illegitimate for the government to appropriate private property through taxes (felling trees), it would be equally illegitimate for us to make use of the stolen property by crossing the bridges.

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mcePaste”>In order to illustrate, let us examine one scenario regarding tax evasion. Suppose that a person’s friends are taking advantage of an

innovative and rather elaborate scheme to save taxes that is based on a novel interpretation of the tax law. Would it be ethical to take

part in this scheme? To begin, we must note the difference between tax avoidance and tax evasion, between exploiting the law and flouting it. It’s all right to minimize taxes by taking advantage of legitimate provisions of the tax law, or even by taking a reasonable position on an unresolved

question of law. But we cross the line into tax evasion when there is no sincere claim of lawfulness.

A good way for the average person to distinguish between a prudent plan to save money and an illegal and immoral scam is to ask a reputable tax adviser. If this professional clearly advises that you need not declare sheltered income, then you may assume that your acts are solidly defensible. But an evasive answer, such as “Nothing will happen to you if you don’t report,” is a sign of danger.

An ordinary person can rely on a reputable accountant, but the accountants themselves cannot just pass the buck. Their obligation to know and conform to generally accepted accounting procedures is legal, ethical and professional. An accountant who deviates from these principles is in violation of the professional code of conduct and may be subject to prosecution. From a Jewish point of view, the accountant is abetting wrongdoing by the client.

-–

Republished in a condensed form with permission from the Business

Ethics Center of Jerusalem (www.besr.org).

Filed Under: Business News

April Small Business Forecast

April 2, 2011 By biz_admin

It’s Survival of the Fittest: Be Sure You Are a Survivor

These days, the Middle East is on everyone’s mind. The events in Tunisia, Egypt, Libya and other Arab countries are reminiscent of the collapse of the Soviet bloc in the late 1980s and early 1990s. However, while everyone can agree that the fall of communism brought democracy and liberty (not to mention open markets) to Eastern Europe, the outcome of the so-called Arab Spring is far from certain.

In fact, with most of the world’s oil supply originating in the Middle East, we will likely see a continued rise in oil prices, which will inevitably affect our anemic recovery from the recession.

As the cost of living increases and the prices of basic necessities rise, consumers have less money to spend on vacations, services, clothing

and other goods. The result is that whatever progress we have made toward a recovery could be reversed. Our economy, nationwide and

in Chicago, is consumer driven. An employed, forward-looking consumer with living expenses under control can confidently shop for cars, clothing and other goods. But when that confidence erodes, watch out.

In addition, small business owners should be aware that a new wave of unemployment is likely coming our way. In state after state, prudent

governors are cutting back on state budgets to keep spending in check. As a result, thousands of local government employees will face layoffs, including teachers, policemen, firefighters and general

office staffers. Nationally, we could see cuts of hundreds of thousands of jobs at the local government level that can and likely will prove to be a real drag on the recovery that we all keep hoping to experience.

Though initial claims for unemployment trended down in March, the numbers tell only part of the story. Millions who no longer qualify for unemployment benefits, or who have simply stopped looking for work, are not being counted. While the stock market continued its climb, until the crisis in Japan erupted, March also saw increases in the cost of commodities such as food and precious metals. It’s hard to predict exactly what will happen with property taxes and the cost of living, but it’s safe to say that we can expect the cost of gas and food to rise in the coming months. Of course, rising costs coupled with employment fears don’t bode well for our economy.

In summary, we continue to advise our readers to be very cautious about debt and to consider and reconsider any new expenses that are

not mission-critical to business operations. Small and under capitalized businesses are very vulnerable to failure during volatile economic

times. If you have not done so already, create and work with a budget which clearly outlines a realistic sales and expense forecast. Review

the forecast weekly and make use of a budget versus actual report to track your progress toward business growth and profitability. It’s

survival of the fittest right now: be sure that you are a survivor.

Filed Under: Business News

Small firms plan growth with long-term contingent labor model

March 16, 2011 By biz_admin

By Ann Meyer

When Bernie DiMeo shuttered his advertising firm last year after 22 years in business, it signaled a new beginning.

Within two months, DiMeo was back, having switched his business from DiMeo & Co., a full-service agency employing 15 workers, to the new Bernie DiMeo Communications, a small public relations firm that relies on independent contractors. He also launched an online apparel business, Rocco Shirts Chicago, out of his home, creating part-time jobs for his wife and oldest son, who recently graduated from college.

“I’m adjusting to the new normal,” DiMeo said. “In this business climate, you better have several streams of income. And, in my opinion, it’s better if they are unrelated,” he said.

DiMeo’s sentiments are being echoed by many small business owners who downsized during the recession and have yet to add workers, experts said.

More firms use independent contractors

Payroll data from Glenview-based SurePayroll indicates 5.35 percent of workers paid in February were independent contractors, up 40 percent from 3.82 percent in February 2009. What’s more, a new report by the Kansas City, Mo.-based Kauffman Foundation indicates while entrepreneurial activity has increased since the recession started, most new businesses are not generating full-time positions. See the related SmallBusinessChicago story.

While the sluggish economy is spurring small businesses’ growing reliance on contractors, it could be a long-term trend, said Michael Alter, president of SurePayroll. In Illinois, SurePayroll’s data indicates employment was down 2.7 percent in February, while use of independent contractors was up 1.6 percent, Alter said.

A new employment model

“This is a permanent change,” Alter said. Technology now makes it easier for companies to find freelancers, while also making it possible to work virtually. What’s more, small business owners recognize the value of paying independent contractors a higher hourly rate but for fewer than 40 hours.

DiMeo is among those who use freelancers to reduce overhead costs, such as office space, health care and other benefits. “Now I don’t care if I never have another full-time employee,” he said. “I feel better being small and manageable,” he said.

Likewise, many former full-time workers like the flexibility of freelance work. Keith Romero, principal at Krome Communications, worked in several different public relations and marketing communications positions before hanging out his own shingle three years ago, when his mother was seriously ill with cancer. At the time, Romero felt he had no other option.

Flexibility a big draw

Now, he said, he has no plans to return to full-time employment. He likes the flexibility and the fact he can take on jobs he is passionate about even if they don’t pay well.

What’s more, Romero said, he hasn’t been pigeon-holed into one specific discipline and looks for ways to diversify.

“One upside to this down economy is increased entrepreneurial spirit,” Romero said.

While Romero said he works seven days a week, he also takes time off during the week. Many others choose freelancing because it allows them to work part-time and set their own hours. Public relations consultant Robin Boesen has worked for DiMeo in on and off for 14 years. Boesen, who has two school-aged children, said she likes the flexibility because it allows her to be involved in her children’s after-school activities. Thanks to technology, she said, “You really can work from anywhere, anytime.”

While many people start freelancing out of necessity, some like it so much they’re unwilling to return to a full-time office job, Boesen said. “They’re going to continue to freelance even as you see more help wanted ads,” she said.

So far, finding talent hasn’t been an issue for DiMeo. He relies on three contractors whom he has worked with before.

For Christa Rivera, who had been a summer intern for DiMeo in 2009 while a student at Columbia College, serving as a freelance account director and art director for DiMeo means she can teach dance about 10 hours a week. “This way I get the best of both worlds,” she said.

Less overhead means lower prices

While relying on contractors keeps small businesses nimble, the contingency labor model generally results in lower prices for customers, giving small firms an advantage over larger competitors with more overhead.

“The new normal is lean. Prices and fees are less expensive,” DiMeo said.

With less pressure to generate more and more revenue, DiMeo has fewer headaches. He prices projects on an hourly basis and drafts plans based on his clients’ budgets. “I go in and say, `You tell us how much you can afford to spend, and I’ll tell you how many hours I can put toward it,’” he said.

DiMeo and his team of freelancers meet as needed at his office, a coffee shop or over lunch. But most of the work is done virtually, Romero said.

Even as the economy strengthens, Romero expects more businesses to work with virtual staffs. “I think the future will be vagencies, virtual agencies,” he said. “More overhead doesn’t reflect more creativity or greater problem-solving skills.”

Expansion a possibility

DiMeo said he shifted his focus back public relations, where he had started his career, because it is easier to manage than a traditional ad firm in this economy. But he hasn’t ruled out expanding the firm or the online apparel business, or adding a third company to the mix.

“My hope is I will at least keep two businesses, maybe more,” DiMeo said. “It used to be OK to be an entrepreneur. Now you need to be a multipreneur,” he said.

—