Open Window Theatre’s Lilies of the Field is an Inspiration

If you’ve ever wondered what a miracle looks like, go see The Lilies of the Field playing at the Open Window Theatre and you’ll see the answer: it looks like Homer Smith.

The downtown Minneapolis theater is presenting a stage adaptation of the William Barrett novel and 1963 movie with Sidney Poitier through May 25. Artistic Director Jeremy Stanbary and director Joy Donley make the most of a minimalist set to create a wonderful night of music and story-telling .

Smith, an African-American Baptist wondering about the country taking day jobs where he pleases, finds himself in the Arizona desert where a group of East German immigrant nuns have set up shop. There is lots of work to be done and Smith agrees to help repair their roof. Mother Maria Marthe, the mother superior, convinces Smith to build the sisters a chapel. Smith agrees, not knowing how the job will ever get done given their lack of resources. Over the course of the play, people in surrounding villages donate the needed supplies and labor, and the chapel gets built. Smith leaves and everyone calls the construction of the chapel a miracle. In the closing scenes, some of the people we meet in the play tell us with great price about their connections to the saint – Homer Smith – who made this happen. 

I like this play for a lot of reasons. First the acting is marvelous: Lamar Jefferson does a great job as Homer Smith. Second, there is some really delightful music by Christopher Erickson. And third, the play’s message really gives the audience something to think about.

The story shows us that one person can do a lot – in this case, a lot more than the person initially himself thinks he can do. It shows us the power of encouragement from someone else. Smith persevered because Mother Maria Marthe believed in him. She is the person who identified Smith as the answer to her prayers, and although Smith resisted that description early on, he eventually accented to that role.

Lilies of the Field shows us that if we are truly being called by God to build something, we should move forward even if we don’t have every detail figured out in advance. This doesn’t mean it will be easy. The nuns in the play lived an austere life, worked hard and prayed hard. There was a little friction at times between Smith and the nuns, and at one point Smith abandoned them and the project. Smith was stubborn and thought he needed to follow his own will. The beauty of the play is the way in which he came around to doing God’s will, at least as the nuns saw it.

Furthermore, I love what came out of that miraculous construction project. The narrator of the play tells us the chapel became the centerpiece of a haven for troubled children who came to the nun’s encampment for rejuvenation. Many other buildings eventually were constructed around the chapel as others took interest in what was going on there. Smith himself moved on so he didn’t see all the good his work led to, but he did what he was called to do. The first phase in any project is often the most difficult.

Lilies of the Field is an encouraging and inspiring story. Watch closely. God may be calling you to be the next Homer Smith.

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Know your strengths

If you work in a small shop like I do, you know you spend most of your time putting out fires – that is, handling day-to-day obligations. It is very difficult for leaders in smaller enterprises to make time for visioning. But instinctively we know it is important. The leader of every company, whether large or small, must set aside time for contemplation. If you don’t take time to visualize the future, you may never see it at all. If you can’t see where you are going, you will never get anywhere.

The most important thing for any leader to know is self. If you don’t know who you are, you will never be able to significantly help anyone, including employees and customers.

A leader doesn’t have to be good at everything but it sure helps if he or she knows his/her strengths and weaknesses. That way, strengths can be leveraged and compensation can be made for weaknesses.

I recently came across a book published by the Gallup organization in 2008 called “Strengths Based Leadership: Great leaders, teams and why people follow,” by Tom Rath and Barry Conchie. Using results from thousands of interviews, the authors explain why it makes sense to invest in your strengths. The book is 266 pages but you only need to read the first 95 pages to get the message.

Each copy of Strengths Based Leadership provides a unique code that gives the reader access to a test-taking web site where your strengths can be identified. The test poses nearly 200 questions, allowing 20 seconds for each response. Questions typically pose two ideas and require the respondent to choose one over the other on a sliding scale.

When you are done, the computer summarizes your responses. My own test results gave me something to think about. Results identified strengths that I expected but they also identified areas where I need to work, some in areas that surprised me. Hmmmm. Maybe that’s why I seem stuck on some projects I have been working on for a long time! These results give me another way to think about these projects.

It’s the middle of March so if you made any New Year’s resolutions, you’ve surely blown them already. But it’s still early enough in the year to set new goals and see results by Christmas. No matter what goals you have for you or your organization, you will have a better chance of arriving at your desired destination if you have a solid understanding of where you are starting from.

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Reflections six years after the financial crisis

It was six years ago that the Federal Reserve and the U.S. Department of the Treasury helped to facilitate the acquisition of Bear Stearns by JP Morgan Chase. The deal was sealed on a Sunday, March 16. JP Morgan Chase bought the bank for $2 per share or about $236 million; 15 months prior the stock market valuation of Bear Stearns was about $20 billion.

Although the mortgage market had started to crumble in 2007, I consider the Bear Stearns event in 2008 to be the beginning of the financial crisis. Several shocking events disrupted the financial markets in the months to come: IndyMac failed in July after comments by Sen. Chuck Schumer triggered a run on the bank, regulators took over Fannie Mae and Freddie Mac in September, Lehman Brothers filed for bankruptcy on Sept. 15, and on Oct. 12 the U.S. Treasury called the heads of nine of the largest financial institutions in for a meeting where Henry Paulson doled out $125 billion.

This sequence of events will be studied by economic historians for decades. Technology and securitization fostered the growth of a global interconnected financial system that outpaced regulatory effectiveness. In fact, our laws, such as the Gramm-Leach-Bliley Act of 1999, only hastened the concentration of assets and made the situation worse. While the FDIC had a fine-tuned system in place for handling small bank failures, the government really didn’t know what to do when the biggest players got in trouble. They made it up as they went along – save Bear Stearns, let Lehman fail – sending all kinds of mixed signals.

The Dodd-Frank Act passed in July 2010 was supposed to codify a procedure for handling the failure of a super-large financial institution. That’s reassuring, although the Washington, D.C.-Wall Street axis remains troubling. Wall Street executives have a long history of putting in stints at Treasury. Jack Lew, the current Treasury Secretary, is a former Citibank employee, which makes me wonder what will happen if Citibank becomes the first institution to test those new big-bank failure proceedings Dodd-Frank gives us. Is it a coincidence that the investment firm to do best during the crisis was Goldman Sachs, Paulson’s former employer? In the end, too-big-to-fail is more a matter of political will than a matter of administrative procedure.

A healthy financial marketplace requires everyone to play by the same rules. We can’t have bureaucrats in Washington, D.C. picking winners and losers. Despite the best intentions of all the elected office-holders and the officials in the various departments and agencies, it just ends up looking like crony capitalism where a select few get special treatment. As a country, we can do better than that.


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What’s your ‘Why’?

I invite you to think about the why behind your business. Running a business, especially these days, is not for the faint of heart. In order to succeed you need to know why you are in it. Simon Sinek has made a name for himself helping people find their why. I encourage you to check out his website and watch his TED talk at

The tendency in business is to start with “what,” as in what are we going to do? The next consideration is “how” – how are we going to identify potential customers? And finally, after figuring out what to do and how to do it, you think about why you are doing it.

Often, business owners say they are in business “to make money,” but it’s really more than that. There are a lot of ways to make money but you chose your specific business. Why? Sinek urges people to start with why. He contends that once a person figures out their why, they will have a much clearer sense about how to proceed and what to do.

I know this is true in my own case. At NFR Communications, my business, our why is about strengthening small businesses. I am passionate about this purpose. How do we strengthen small businesses? We do it by working directly with the banking industry. By providing information, ideas and analysis to community bankers, we enable bankers to be more effective small business partners through lending, other financial products, and counsel. The “what” in our case is NorthWestern Financial Review magazine and its accompanying website.

With a clear sense of why, you have a better chance of arriving at an effective answer to “what?” Instead of viewing why as the destination, view it as the engine. You have heard about purpose-driven enterprises; these are run by folks who know what their why is.

A strong sense of why is important because the best customers are those with whom you share a strong sense of mission. When two entities share a mission, they become partners. Relationships — business and otherwise — rooted in a common mission have a much better chance of enduring than relationships based on other factors such as price, convenience or even service.

So what’s your why? If you aren’t sure, take some time to think about it.

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A look at the qualities of success

While economic growth in the United States has been slow since 2008, some businesses have done very well in the last few years. Consider the 250 businesses that are finalists in Ernst & Young’s 2013 Entrepreneur of the Year program. These businesses are expanding, creating jobs and making money.

Last year, Ernst & Young teamed up with the Kaufman Foundation, which is dedicated to promoting entrepreneurship, to survey the leadership of the 2012 finalists. How is it that some managers lead their companies to growth at a time when so many other managers hunkered down, just trying to keep their doors open? The research showed that successful entrepreneurs:

Have a unique perspective on risk. A majority of the entrepreneurs indicate they believe entrepreneurs are born, not made. These folks have a passion for identifying unmet needs in the marketplace and then set out to meet them.

Communicate their vision and instill passion in great teams. These companies overwhelmingly cite people as their leading priority. This is in sharp contrast to well-established global companies, many of which have been more interested in implementing efficiency and productivity increases that translate into headcount reductions.

Demonstrate resilience and rapid recovery. While all businesses make bad decisions from time to time, the best entrepreneurs and their teams seem to bounce back from those mistakes with minimal damage, many even learn from their mistakes and emerge stronger.

Embrace innovation. Established companies tend to resist radical innovation that might displace their existing revenue streams in the short term. Successful entrepreneurs know that their agility and propensity for innovation can make them an attractive investment, acquisition or partnership target.

Do what they do best. High-growth entrepreneurs focus on the things they do best and find partners to handle the technology, administration and anything else outside their expertise.

Preserve what they’ve built. Successful entrepreneurs look to preserve those qualities that made them a market leader. Their top concerns: preserving company culture, attracting and maintaining top talent, protecting and enhancing brand/reputation and retaining best customers.

Has your organization been performing at peak during the last few years? If not, think about these qualities. If they don’t describe your company, what would it take to develop these qualities among at your company?

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Chesterton Academy is response to Kelly’s call-to-action

I have been a fan of Matthew Kelly for a few years. In preparation for a book study group I am going to begin leading at my parish next month, I just finished rereading his best-seller “Rediscover Catholicism: A Spiritual Guide to Living with Passion and Purpose.” This book is the most compelling call-to-action for 21st century Catholics that I have ever read. If you are Catholic and have been away from the church for a while, I encourage you to pick it up and read it.

And you don’t even have to buy the book. The Archdiocese of Saint Paul and Minneapolis is conducting a very ambitious evangelization project around the Rediscover theme. It is giving away tens of thousands of copies of Kelly’s book. Go into almost any Catholic church in the area and you will find free copies of the book available to anyone who wants one. I took an extra one for an out-of-town relative and mailed it to him.

Every chapter in the 320-page paperback is filled with ideas worth contemplation. In this essay, however, I want to focus on chapter 19, entitled “Time for a Change.” Beginning on page 277, it opens Part 4 of the book. I have long had an interest in education, serving on the board of advisors for my parish grade school, and being involved in the founding of Chesterton Academy. Kelly has some exceptional comments to make about the state of education today. Consider these direct quotes from the book:

The Catholic education system as a structure is one of the marvels of world history. It is the cause of envy among countless other groups and organizations. Those with an agenda dream of getting access to a system as powerful as the Catholic education system. Why? Because they realize how powerful it could be if it was actually employed. That’s why it is under attack, and why so many people have forced their agendas upon the Catholic education system. All the while, we have failed to use it for the good it was created to produce in students, families, the Church, and society.

Do we want to teach our children about Jesus, the value of virtue and character, and the beauty of the Church? Or do we just want privileged educational environments to teach them what they need to get into the best colleges? Do we want to prepare them for life? Or do we just want to prepare them to become cogs in the global economic wheel? Do we believe that by teaching them about Jesus and the role the Church can play in their lives we are better preparing them for college and for life? Or have we resigned ourselves to the spirit of the world? Page 283.

The Catholic educational system is perfectly positioned to ignite within the hearts and minds of young Catholics a sense of passion, awe, and hunger for truth. It is critical that we reassess at this juncture what we wish to bestow upon those who attend Catholic schools. If it is simply an elite education for a privileged few, then surely we are in direct conflict with the very Gospel that we claim to be guided by. But if we wish to bestow upon our children the values and beliefs that emerge from the life and teachings of Jesus Christ, then clearly it is time for a change. Page 287.

…It seems to me – and I may be wrong—that the Catholic education system will actualize its potential not by shying away from all things Catholic, but by doing what it claims to do and offering a Catholic education..

…with so many of our Catholic high school students rejecting the faith in high school or shortly after they graduate—and I assure you the percentage is enormous—it is impossible not to question our current approach… Page 288

Matthew Kelly is spot-on with all these remarks, and it is precisely this kind of thinking that led Dale Ahlquist and me to start Chesterton Academy six years ago. The school will be opening next week with more than 100 students; while we are not an official archdiocesan effort, our school incorporates Mass into the daily schedule, every member of our faculty takes an annual oath of fidelity to the magisterium of the Catholic Church, and our entire curriculum is organized and taught around the mystery of the Incarnation.

The school is growing because many parents are asking the very same questions that Kelly asks. As parents, we are responsible for the education of our children. We don’t get a second shot at this. Our children are teenagers only once. As parents, we have to give this our best effort and Chesterton Academy is the fruit of that effort.

Fall is a marvelous time of renewal. As the new school year gets underway, it’s a great time to renew our faith. The Archdiocese of Saint Paul and Minneapolis has given us a magnificent tool in Matthew Kelly’s work. Dig into the book, and then hear him speak at the Archdiocese’s Rediscover event at the River Center in Saint Paul on Oct. 12. Kelly and many other inspirational speakers will offer encouragement for those trying to live their faith.  

 Then, after you’ve studied the book and heard the speakers, think about your life and what you need to do to respond to God’s invitation to come to Him. Live your faith and you, your children and our world will be better off.

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Hire for success

Walter Bond is a former NBA basketball player who speaks to groups about what it takes to succeed on the court and in the office.  When Bond played college ball at the University of Minnesota, he won the most improved player award four seasons in a row. Successful people, he said, always seek improvement.  “Average people are okay being average, but successful people what to improve,” he told a group of Iowa bankers last summer.

I pulled out my notes from his talk to an Iowa business group last summer because it struck me that it has never been more important to hire the right people. Bond’s comments offer insight into who those people might be.

Improvement means change, so a successful person is someone who is willing to change. “Is your organization becoming obsolete because everything around you is changing and you’re not?” he asked.

Successful people also pay attention to detail, and they are confident. They don’t complain. Too many people like to throw themselves a “pity party,” Bond said. “Ninety percent of life is pretty good, yet too many folks focus on the 10 percent that is negative.”

Bond challenged each member of his audience to consider whether they are likeable. “People want to be around people they like, so do people like you?” he asked. “If someone likes you and you screw up they are likely to give you another chance. If they don’t like you they will walk away.”

Likeable people brighten up a room. Bond said his college coach Clem Haskins could brighten up a room. Recalling the recruiting visit Haskins made to Bond’s family home, Bond stressed that the most important evaluation points in a new relationship occur the first time someone sees you and the first time they hear you speak.  Smiling and making eye contact, Haskins made a good impression, he said.

Bond said any office wants people who smile and make eye contact. Those skills help a person not only to communicate but to actually connect. Deals get done when people connect.

At 6-foot-5, Bond is short by NBA standards but he carved out a niche for himself as the top sixth man in the country. He always dreamed of being a starter but found he was best suited to come off the bench. He made the most of his niche, which lasted eight years in pro basketball. He urged bankers to find their niche and make the most of it.

Hiring the right people is never easy but Bond’s comments give us a little better idea of what to look for.

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Note to Minnesota lawmakers: Business-to-business tax proposal should be dropped

As the legislature considers a variety of tax reform options, I urge lawmakers to reject the implementation of a business-to-business sales tax.

In his tax reform proposal, Gov. Dayton advocates for a reduction in the state sales tax rate but a broadening of the sales tax base, including a new business-to-business tax. If additional state revenue is truly necessary, I urge the Governor and lawmakers to focus on the income tax. A business-to-business sales tax is both regressive and opaque, making it an objectionable option for tax reform.

As the sole owner of a small publishing company dependent upon advertising revenue, I quickly calculated the impact of the proposed 5.5 percent tax on advertising, one of the business-to-business services targeted in the Governor’s proposal. The amount would be about 16 percent of my company’s net income, on top of the income tax I already pay.

Advocates for the tax will argue that I should be able to pass that sales tax cost onto the purchaser. While that may have been possible in the pre-financial crisis environment, I can assure you that is not possible today. My business competes with publications based in surrounding states; these competitors can offer ad rates free of sales tax. If I want to compete, I have to respond to the market; ad buyers already negotiate hard and there simply is not 5.5 percent leeway in those negotiations. Implementation of the tax will mean customers will buy less or I will have to pay the tax.

Painfully, I will be required to pay for this tax regardless of my net income. Even in years when things are slow, I will be subject to the tax. Although I am not a fan of paying taxes I am willing to pay my fair share according to my earnings. An income tax has the semblance of progressivity; this business-to-business tax approach ignores ability to pay, making it regressive.

If the argument is made that all sellers of business services can pass the tax along, the obligation to pay the tax ultimately hits the working consumer. There is no place for the average citizen to pass along the tax. He or she is stuck with it in the form of more expensive goods and services. And again, the obligation applies regardless of ability to pay, making it unacceptably regressive.

Furthermore, it will be very difficult for consumers to determine what portion of the purchase price is the result of taxation. As vendor after vendor in the supply chain build in new layers of tax, the consumer will be hard pressed to discern what portion of the purchase price reflects the cost of the product and what portion represents taxation. That kind of opacity also is unacceptable.

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Dad shows one person can make a big difference

2012 was a of many blessings but I will remember is as the year my father passed away on June 7. In December, television typically offers “It’s a Wonderful Life,” a film that means a little bit more to me now than it did before. George Bailey gets to see what life would have been like had he not been born. I always considered it to be sentimental Hollywood fantasy but not anymore. After Dad’s funeral, I got a real-life glimpse at the impact one man can have on others.

Among my Dad’s personal things was a scrapbook containing newspaper clippings, mostly from Big Ten football games when the Gophers were national champion material. But on one page there is a picture of my Dad from a newspaper dated December 13, 1950. My father, a 21-year-old student teacher at the time, made the papers because he saved the life of a man named Clarence Bonham.

Mr. Bonham was the industrial arts teacher at Bryant Junior High in Minneapolis and my Dad was studying under him. Mr. Bonham was operating a lathe when something went wrong and the wooden spindle he was making shattered; one piece went through a window 30 feet away, another piece went into Mr. Bonham’s arm, severing an artery. My father applied a tourniquet to stop the bleeding and doctors later told him his quick action saved Mr. Bonham’s life.

My father rarely talked of this incident but after seeing the newspaper clipping I got to thinking about Mr. Bonham. What became of him? So last summer I set out to see what I could learn.

A Google search on the name turned up nothing useful, but I had more luck at There, I was able to find Mr. Bonham’s name among data collected for the 1940 U.S. Census. I learned that Clarence Bonham was 43 at the time of the accident, and that he and his wife had two daughters, Mary Jo and Betty Jane. They would have been 15 and 16 years old in 1950. From there, told me that Betty Jane married Thomas A. Lies on Sept. 19, 1959. Googling the name Thomas A. Lies, I found a 2005 obituary for him. It was published in a newspaper from Princeton, N.J. An online phone book for Princeton readily produced a phone number to Betty. I called her and she answered the phone.

I think Betty was a little dumbfounded by my call but we had a wonderful 20-minute conversation. She remembered the accident and said that her mother was sick that day so that when someone from the hospital called with the news, she took the call and almost fainted with anxiety.

Clarence Bonham recovered, eventually left teaching, and built a home on Lake Beltrami in northern Minnesota. Betty said she and her sister have wonderful memories of living on the lake. Mr. Bonham lived to be 69 years old, dying in 1976.

So if my Dad hadn’t been there in 1950, Mr. Bonham would have been cheated out of 26 years of life. He wouldn’t have seen Betty Jane marry Thomas Lies in 1959. He wouldn’t have built that home on the lake; Betty Jane and Mary Jo wouldn’t have any of those happy memories of life in northern Minnesota.

Sometimes there is symmetry in history. Ten years (almost to the day) prior to the accident in the woodshop at Bryant Junior High, my father’s father died, leaving two young children and a wife. Fate denied my Dad and his sister the happy teenage memories they otherwise would have had with their father. It could have been the same for the Bonham girls, but Dad made sure they got something better.

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Micobusiness entrepreneurship is key to job growth

The “micro” end of the small business sector offers valuable opportunity for employment growth; policymakers interested in expanding employment in Minnesota should do everything they can to encourage microbusinesses, also called SOHO (small office/home office) businesses.

Use the term “small business” and many people think of a factory, store or professional services firm. These firms, which may employ dozens of people and collect millions of dollars in annual revenues, are actually among the larger businesses in the small business category. They are the exception more than the rule. Across the country, most businesses actually are much smaller. Twenty million businesses — or seven in ten — have fewer than five employees and less than $100,000 in annual revenue. It is this microbusiness category which is creating so much recent employment opportunity.

Since 2008, when the employment market tightened up, more people have ventured into entrepreneurial territory, launching their own business, typically out of their garage or spare bedroom. Many of these become vibrant businesses, selling or making everything from cosmetics to dog food to software. Some of these businesses will grow beyond the microbusiness classification, but most will not. Nonetheless, many will provide meaningful employment for their founders and others, not to mention great products and services to customers.

Microbusinesses are highly personal, get very close to their customers, and are free to attempt innovations that would be stymied in committee at a larger company. The smallest end of the small business sector is incredibly important to the overall health of our economy and even to the quality of living in our state.

Employment at many of the mid-size companies and larger firms in our state has fallen flat or is evening declining. Any incentive the state could offer these companies to boost employment would surely come at a high cost to taxpayers. Encouraging employment in the microbusiness sector, however, is much more promising.

Following are four things the state could do right now to encourage microbusiness employment at no taxpayer cost.

No. 1 – The state should work with municipalities to allow entrepreneurs to operate low-impact microbusinesses in their homes.

Currently, many municipalities have ordinances which prevent homeowners from operating a business in their home. Other ordinances prevent a homeowner from employing more than one person in their home. These ordinances were created a long time ago when operating a business typically meant manufacturing (which involved the use of loud, perhaps dangerous machinery) or retailing (which involved significant customer traffic).

It is appropriate for city ordinances to protect residential neighborhoods from noticeable commercial intrusion. However, many businesses are in no way noticeable to their neighbors. Thousands of businesses impact their place of business no more than the typical activities of a family of four. Many businesses today happen on laptop computers and telephones, involving no customer traffic, no deliveries, no industrial machinery or even on-site exchange of funds. Rules which discriminate against these kinds of businesses should be stricken from city codes throughout the state.

An entrepreneur running an internet business with two employees would not be allowed to operate in a home in Minneapolis, or many other municipalities in the state. This is a significant disincentive for many budding entrepreneurs. To force a nascent business into a commercial space is a needless economic burden. For most people, their home is their greatest asset; why prevent an entrepreneur from leveraging that asset for the start-up of their business?

No. 2Anyone starting a self-employment venture should be allowed to continue receiving their full unemployment benefits.

Getting laid off is a difficult experience for anyone; Minnesota’s unemployment insurance program provides some income for the person until he or she lands another job. But for some people, self-employment would be a much better fit than a job with another employer.

Our current unemployment system, however, discourages a person from entering entrepreneurial territory. If someone collecting unemployment earns money operating their own business, their unemployment benefit is reduced, typically by 55 percent of the amount they earned in the business. For example, if an unemployed person is receiving a $300 per week unemployment benefit, and then nets $200 selling hand-crafted birdhouses, his insurance income will be reduced by 55 percent of the $200, or $110. Instead of adding $200 to his $300 unemployment benefit for $500, he would add $200 to $190 in unemployment for a total of $390. In other words, his entrepreneurial work only yields $90 in this example. This kind of penalty on entrepreneurial work by recently-laid off workers is a huge disincentive for people to try entrepreneurial ventures.

Laid-off people should be able to collect the entire unemployment benefit for the duration of their unemployment insurance payment period, usually 26 weeks. This kind of a safety net would encourage many budding entrepreneurs to try ventures they otherwise might dismiss. People are much more likely to try something if they know the fruits of their work won’t diminish income they may already be receiving.

For some people a half-a-year’s income stream is sufficient for them to get a meaningful business venture off the ground. Income from the business, of course, would be subject to normal income tax, and standard payroll taxes would apply to any employees.

Minnesota’s unemployment insurance system is funded by private companies. It is true that if people are allowed to collect their full benefit while earning self-employment income, the fund will likely pay out more money, thus creating a need for it to charge higher premiums. However, the additional income tax generated by this kind of activity could be used to fund the difference in the unemployment insurance premium. This keeps this idea revenue-neutral for the state and for the companies that pay into the unemployment insurance fund. Most importantly, however, this idea creates an opportunity for a small but important group of people who simply need a little encouragement during a difficult time in their lives to try something entrepreneurial which may end up providing a valuable and useful product or service to the rest of the world.

No. 3Minnesota entrepreneurs should be allowed to take a tax deduction on fractional use of their home office for business.

Current federal tax law permits a business owner to deduct expenses for the maintenance of a home office only if the room in the home is used exclusively for business. So if a person works in a home office all day, but they sleep in it at night, they are not allowed to take any deduction for the home office. The tax code – at least in Minnesota — should be changed so the entrepreneur can deduct expenses proportional to business use.

For example, if a business owner figures that $1,000 per year are going toward the maintenance of his home office, which he uses 50 percent of the time for his business, he should be able to claim a $500 deduction against his income. Currently, the law would not permit any deduction because the home office is used only partially for business. Minnesota business owners should be able to take this deduction on their state income taxes, even if they are not allowed to take it on their federal income tax forms.

While it is difficult to predict the exact net tax effect of this concept, it is likely the net effect would be zero. While the creation of a partial home office deduction would encourage some people to take a new deduction, it would also encourage some people to reduce the deduction they currently are taking. With the law specifically permitting partial deduction, some people who currently are take the full deduction and foregoing personal use of their home office space, will decide that they now will use their home office space for personal use and take a corresponding smaller deduction. Many people who set aside a room in their home for business use either refrain from using the space occasionally for personal use because of the 100 percent business use requirement, or do in fact use the space for home use but take the full deduction anyway. This provision will allow them to align their actual intended use with the Minnesota state tax code.

No. 4Exempt online businesses less than three years old with less than $100,000 in annual revenue from collecting sales tax on internet transactions.

The legislature is very interested in requiring Minnesota businesses that sell online to collect sales tax, which they say would put them on parity with brick and mortar retailers. The collection of sales tax is a burden on small and start-up businesses. If the state decides to mandate the collection of such tax, it should give microbusinesses three years to get its sales-tax collection system in place.

Keep in mind it is the purchasers who technically are responsible for paying the sales tax to the state of Minnesota. This would not change. People who purchase items from small start-up businesses on the internet would continue to be responsible for paying sales tax.

It is presumed the Minnesota Treasury will see a significant increase in sales tax revenue should it mandate the collection of sales tax on internet transactions. It would help small businesses if they were given three years of start-up time to perfect their online sales processes before being required to forward sales tax onto the state.

These four ideas are modest but they would make a big difference in the minds of many people contemplating starting a new business. Many people have the experience, skills and knowledge to succeed in their own business venture. Many of them simply need a bit of encouragement to take the first step. Minnesota policymakers could be the ones to provide that encouragement.

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