- From The Confident SMB, March 2010 Issue (Download This Entire Issue in PDF)
The Enduring Family Business
A Third of S&P 500 Companies are Family Businesses that Began Small with a Big Vision
Family businesses are an often overlooked form of ownership. Yet they are all around us—from millions of small and midsize companies that underpin many economies to household names such as BMW, Samsung, and Wal-Mart. A recent McKinsey report1 finds that less than 30 percent of family businesses survive into the third generation of family ownership. However, those that do, tend to perform well over time compared with their corporate peers.
What are the attributes of a successful family business?
1. Meritocracy. Successful businesses that survive many generations have a strong management ethos based on meritocracy.
2. Control. Maintaining family control while raising fresh capital is a major source of potential conflict. Enduring family businesses regulate ownership issues—for example, how shares can or cannot be traded inside and outside the family.
3. Participation. Families that participate actively in company boards fare well. On average, 39 percent of board members in family businesses listed on the S&P 500 are inside directors, compared with 23 percent in nonfamily companies.
4. Long-term perspective. Successful family companies seek steady, long-term growth and performance, rather than short-term gains that avoid risking the family’s wealth and control of the business. This also serves debt-holder interests: family businesses tend to have lower financial leverage and cost of debt than corporate peers.
5. Value, not size. Family businesses make smaller but more value-creating M&A deals than their corporate counterparts. According to McKinsey’s analysis, the average family business M&A deal was 15 percent smaller, but total value added— measured by market capitalization after the announcement—was 10.5 percent, compared with 6.3 percent for nonfamily counterparts.
6. Philanthropy. Charity is an important element in keeping families committed to the business, providing meaningful jobs for family members and promoting family values for future generations. In the U.S., family-funded foundations include 13 of the 20 largest players.
For the full report, click here.
1Christian Caspar, Ana Karina Dias, and Heinz-Peter Elstrodt, “The five attributes of enduring family businesses,” McKinsey Quarterly, January 2010.
Windows 7 Gains Momentum
IT Professionals at Small Business Have Been Most Aggressive in Their Plans to Upgrade to Windows 7
A recent Spiceworks’ Voice of IT report measures upgrade plans and adoption sentiment on Windows 7 before and after its official debut. With results from over 1,500 respondents, highlights from the report include:
The number of SMBs planning to adopt Windows 7 grew by 20 percentage after the official launch
IT pros at the smallest firms (<20 employees) are upgrading the fastest, at more than double the rate of larger organizations
The top two reasons for moving to Windows 7 were speed (73 percent) and user interface (69 percent)
In the next 12 months, 45 percent of Windows 7 installations will be on new machines, while 55 percent will be on existing machines
For the complete report, click here.
Cybercrime Made Easy
Do-it-yourself Kits Drive a Surge in Internet-Borne Computer Infections
Do-it-yourself (DIY) kits are becoming big business in the cyber underworld, according to a recent report in USAToday.com. Generally sold for $400 to $700, the kits come with everything you need to begin infecting PCs. Selling software is legal; it’s what you do with it that can get you in trouble. Rookie and veteran cyber crooks alike are using DIY kits to carry out phishing campaigns, blasting out fake e-mail messages that look like official notices from UPS, FedEx, or the IRS, or account updates from Vonage, Facebook, or Microsoft Outlook, or even medical alerts about the H1N1 flu virus. “It’s possible that the people creating and selling these kits may be the same groups already profiting from cybercrime, and they could see this as yet another revenue stream,” says Marc Rossi, manager of research and development at Symantec.
For more on this report, click here.
Luring the Needy into Cybercrime
Remember the swirling letters and numbers you’re asked to type in as a verification measure when you log in to supposedly secure websites? Well, cyber criminals have figured a way around these CAPTCHAs—Completely Automated Public Turing tests to tell Computer and Humans Apart. According to the MessageLabs Intelligence: 2009 Annual Security Report, CAPTCHA-breaking tools became more readily traded in the underground cyber economy in 2009, and criminals were able to create large numbers of real accounts for webmail, instant messaging, and social networking websites.
In fact, a new kind of business has emerged, specializing in providing real people to create real accounts on major webmail services. Often advertised as a data processing job, each worker can receive approximately $2 to $3 per 1,000 accounts created, with each being sold to spammers for around $30 to $40 per 1,000 accounts.
Some major sites are already investigating alternative verification methods such as large libraries of photographic images, whereby users must be able to analyze or interact with the image in a way that would be very challenging for a computer program.
For the complete MessageLabs report, click here.
BBB Launches FREE Data Security Guide for Small Business
Nearly 85 percent of data breaches occur at small businesses, according to a September 2009 report by VISA. Responding to this trend, the Better Business Bureau (BBB) has launched a free, customized education program called “Data Security—Made Simpler” to help small business owners develop and implement effective data-security strategies. Data security can sometimes be an overwhelming topic for small companies, and this program is designed to demystify the complexities of data security tools. “While data breaches affect businesses of all sizes, many small business owners aren’t taking the necessary steps to create ongoing data security policies and practices, including training their employees,” says Steve Cox, President and CEO of the Council of Better Business Bureaus.
Developed in partnership with Symantec, VISA, Kroll’s Fraud Solutions, and NACHA—The Electronic Payments Association, the program is presented by Kelley Drye Warren, LLP and Bryan Cave, LLP. To learn more about this program, click here.
Security in 20 Minutes
For small businesses to get the most out of a network security application, it should be easy to install and use, offer robust functionality, and minimize hardware and network complexity. According to a recent product review by ChannelWeb, Symantec Endpoint Protection Small Business Edition offers all of these characteristics. “[It] is smart, well-tailored to small business, and easy to manage. And, yes, it takes about 20 minutes to install—from start to finish—so a small network can achieve nice security with minimal hassle,” says Edward F. Moltzen, who reviewed the product for ChannelWeb. Tested at the CRN Test Center lab, Symantec Endpoint Protection Small Business Edition was installed and configured in about 16 minutes, with a few more minutes to build software for network clients.
For the complete review, click here.
Deduplicate Data, Replicate Savings
Delivering on its deduplication strategy, Symantec has launched Backup Exec 2010 to offer midsized businesses a flexible approach to eliminating duplicate data without adding complexity. According to market research, while storage capacity is growing 48 to 50 percent each year, approximately 70 percent of data stored is duplicate and has not been accessed in more than 90 days. Thus, organizations that implement an integrated deduplication and archiving solution can realize savings of up to 20 to 40 percent in storage costs while making critical information more readily accessible.
Backup Exec 2010 offers fully integrated data deduplication and archiving technologies and is the first backup and recovery solution to offer granular recovery of Microsoft Exchange 2010, SQL Server, and Active Directory in VMware as well as Microsoft Hyper-V environments from a single pass backup. It also enables integration with third-party deduplication appliances through the Symantec OpenStorage Technology (OST) program.
For more information, click here.
PC Advisor Awards 2010: Norton Wins PC Advisor’s Best Security Software Award
PC Advisor Awards 2010 have named Norton Internet Security 2009 as the Best Security Software. Combining solid protection with a user-friendly interface, Norton gains accolades from the PC Advisor test center for the accuracy of its reputation-based algorithm, which helps it protect against rapidly evolving threats. Antispyware and firewall tools are included, along with strong measures to thwart Trojans, viruses, and rootkits. An intuitive interface allows users to see exactly what’s what and tweak the setup easily.
For the complete review, click here.
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