Airlines battle of Los Angeles

There are more than 50 flights a day between Los Angeles and San Francisco, enough for one of every 20 minutes from 06 to 22:30 Delta Air lines (DAL) still sees room for more.

The airline making a splash on Aug. 1, when it announced new hourly shuttles between LA and San Francisco, along the lines of the service it operates between New York and Boston, Chicago and Washington. Shuttles are only scheduled flights with separate, faster check-in desk, a Liberal, 30 minute check-in the window and during the flight of free newspapers, wine and beer. (In California, Delta two counters from the State go with Sierra Nevada and Wente,.) The shuttle extension is a push by Delta on its market share at the Los Angeles International, boost, where it invested in a new terminal 5 and new clubs, a project, which be expected to be finished in 2015.

Los Angeles, a hub of United (UAL) is the site of a modest skirmish between Delta and American (AAMRQ), who are planning new domestic flights this summer. American, which is on the verge of a merger with US Airways Group (LCC), sees Los Angeles as an important market which allow its corporate reconstruction business. Not stops the airline of new LA are based on medium-sized markets, are home to large companies: Pittsburgh. Columbus, Ohio; Hartford. Conn; and Bentonville, Ark (airline blogger Brett Snyder called American Los Angeles intending to "Let us a bunch of money losing, before new management coming 2012 tour summer.")

In July, on the basis of Atlanta Delta announced new flights from Los Angeles to Portland, Oregon/United States, as well as expanded service in Oakland, California; San Jose; New Orleans, Louisiana Kansas City, MO; Indianapolis; Columbus; Tampa; Raleigh, NC; Jackson Hole, Wyoming; and limited service in three cities in Montana. The new shuttle operation carried by 76-seat of regional jets, is largely an extension of the Delta strategy California travelers a viable option for United, especially between the two most important business centres of the country.

United and American both serve about 19 percent of the traffic at LAX, followed by Southwest (LUV), according to the Bureau of transportation statistics. Delta was fourth, with 13.6 percent. San Francisco and Los Angeles were the top traveler destinations from any city or some 1.68 million passengers per trip in the 12 months that 2013?? is New York to April ranked second by two California cities.

"[LAX] always somehow a Boston;""No one has ever really has everything," Delta spokesman Anthony Black said Monday.

Added to flights, Delta Shuttle service of its existing lineup only three flights from September with 14 days of the week, and it will still add up to one less flight each day as United (UAL) currently offers. The two carrier business already find many Nonstops on the LA-SF line: Southwest flies 11, Virgin America has nine and American six.

In 1994, United shuttle by United, began a separate West Coast unit designed to have lower costs. It survived airline downturn not 2001.

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This Is What Would Happen If Fast-Food Workers Got Raises

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AppId is over the quota

Even McDonald’s (MCD) own hypothetical household budget (pdf) for its restaurant employees seems to suggest it’s difficult, at best, for many in its low-wage workforce to make ends meet. And all this week thousands of fast-food workers at many of the biggest U.S. restaurant chains have staged short-term walkouts in seven cities: New York, Chicago, St. Louis, Detroit, Milwaukee, Kansas City, Mo., and Flint, Mich. The workers are demanding a pay raise to $15 an hour, compared with current average wages across the industry that are closer to the federal minimum wage of $7.25. President Obama has proposed raising the lowest wages to $9 an hour, which would be a 24 percent jump over the minimum wage.

Food-service workers are among the lowest paid in the country. Here’s what Payscale.com data, based on about 3,000 employee surveys, show about how much workers are making at the country’s 10 biggest fast-food chains compared with workers in other fields. Not all the chains listed here are facing protests this week—they are instead being highlighted for the size of their workforces:

So how much could restaurant chains stand to increase their wages before profits evaporate? It’s a complicated question. Based on years of research, some economists are now advocating a minimum wage of $10.50 (PDF), which they claim would increase a chain’s costs by only 2.7 percent. Roughly half of food-service workers currently make less than that proposed $10.50 rate, so not everyone would be affected. The companies could make up the difference through a combination of price increases—say, a nickel more for a burger—reduced turnover, productivity gains, and “a slightly more equal distribution of companies’ total revenues,” which is a nice way of saying the highest-paid employees would see their incomes increase more slowly, explains Jeannette Wicks-Lim, an economist at the University of Massachusetts Amherst and one of the signees of the petition.

Here’s a rough look at how fast-food financials break down. There are two kinds of restaurants: those run by the company, and those run by independent franchisees who set their own wages and pay royalties to the company (at many chains, most locations are franchised). Together, company-owned and franchise McDonald’s locations last year contributed $3.9 billion in economic value added, a measure of profit that subtracts for taxes and the cost of capital, according to Craig Sterling, managing director and global head of equity research at evaDimensions. Burger King’s (BKW) economic profit was $61 million by this EVA metric.

As companies report financials only for company-owned locations, here’s what payroll expenses and margins look like at company-owned stores at two chains, based on their annual filings.

Based on these numbers, raising the hourly wage to $15—about two-thirds more than what the average employee earns now—would likely wipe out profits at these company-owned stores. “If wages are the majority of labor [costs], and it doubled to more than 50 percent of revenue, restaurant operating income would clearly be a loss, assuming static menu prices,” explains Sharon Zackfia, an analyst at William Blair & Co. Assuming all wages double and other expenses don’t decrease, menu prices at McDonald’s would have to go up about 25 percent, which means an extra $1 for a Big Mac and a “Dollar Twenty-Five Menu” in place of the Dollar Menu, estimates the Columbia Journalism Review, which would be a big deal to consumers. A smaller price hike is perhaps more feasible.

Wages at franchised locations are a separate issue all together. Margins at these stores are likely lower than the figures above because of expenses and royalties that company-owned stores don’t have to pay. So before they could increase wages, franchisees would likely have to work out a better deal with the company.

Franchisees currently contribute about one-third of McDonald’s revenue and 40 percent at Burger King, so lower fees would certainly hit their bottom lines, as it would with any chain using that model. But, as Sterling noted in an e-mail, “the bottom line is that these firms have plenty of profits to go through before they go out of business.” Still, any move that would affect profits would provoke an almost certain Wall Street response: “Don’t think investors won’t care or react,” he said.

Of course, these are all hypothetical changes, and there’s no reason to think that the fast-food industry will suddenly stop protecting its profits in the face of these protests. If higher wages do come, raising prices is the preferred way to get there. “Inevitably, we anticipate most restaurants will pass on the wage increase to customers via price increases,” William Blair & Co. states in a report. So if workers succeed in their push for bigger paychecks, get ready for pricier Big Macs.

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CVS Is Pushing Obamacare. Will it Backfire?

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The Affordable Care Act is a bit of a Rorschach test. The law’s legions of opponents see what they call “a government takeover of health care.” Fans see a new social program that’ll become “extremely popular.” When pharmacy chains look at Obamacare, they see new customers.

CVS Caremark (CVS) recently announced that it would use its retail stores to promote the new health law to uninsured Americans who will be eligible to buy coverage through new online insurance marketplaces, starting on Oct. 1. Stores may host so-called “navigators,” who will be employed by states to act as advisers helping people enroll; this means that confused shoppers could walk into a CVS store armed with questions and walk out having figured out which health plan suits them best. Walgreen (WAG) last month made a similar announcement that it would help get the word out about Obamacare’s options online and in stores.

It’s a pretty simple equation: The U.S. market for health care is about to grow as millions of people become insured, and companies that sell medicine are trying to capture as much of the growth as possible.

What about the potential backlash from Obamacare foes? A Minnesota group called Citizens Council for Health Freedom blasted CVS in a news release on Monday, calling on shoppers to stay away. “Don’t alienate customers with politics and push away more than half of Americans who disapprove of Obamacare,” the group wrote. Asked if it’s worried about angering ACA critics, a CVS spokeswoman said in an e-mail that the company wants to help customers “make informed decisions” about health-care options.

CVS is the country’s second-largest drug-benefit manager, with a retail footprint of 7,400 stores. It seems pretty clear that the company figures it has much more to gain from new Obamacare customers picking up everything from greeting cards to toilet paper on a trip to the pharmacy than it stands to lose by disaffecting right-wingers, who may shop elsewhere. “We have a unique opportunity to introduce [customers] to the other products and services available across the entire store,” Mark Cosby, president of CVS’s retail business, said on the company’s earnings call on Tuesday morning, according to a transcript. CVS reported $31.2 billion in revenue and adjusted earnings-per-share of $0.97 for the second quarter, slightly above analysts’ estimates.

Pharmacy chains are increasingly moving beyond simply selling medication to directly providing such health-care services as flu shots and exams. CVS operates 684 clinics in stores and plans to have nearly 800 by yearend. The company sees opportunity with so many new patients getting insurance and not enough primary care doctors to treat them. “Our longer term goal is to create a national primary care platform,” Chief Executive Larry Merlo said on the call today. Helping people sort through their health-plan choices just might be a natural fit.

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Margarine: Unilever can't believe it is not for sale

Unilever (ULVR) business of spreads looks about as tight as hot margarine. The spreads category includes such hidden Staples like butter, peanut butter, cream cheese, Marmite, even Nutella - see how it works. Spreads make up 7 percent of sales at Unilever and consumer goods conglomerate concentrates strongly on the butter substitute - spread sadness largely a history of margarine to decline seems. The company sold the stuff under a dizzying array of brand name - I can't believe, there is no butter, country crock, Imperial, Brummel & Brown, promise, Becel, flora, Rama and blue band, among them - and there is little advantage in the game.

Last week, when sales for its food in the first half of the year fall Unilever a 1 percent reported , noted the special pain caused the company by "a decline in spreads" and highlighted some problems with margarine as the culprit. Consumers don't like the taste of certain brands (flora, in particular, is not fool anybody to think it would be butter), rivals have been compete on price and shoppers now prefer natural products of the people caused fat come, seem like a useless idea. While growing health awareness can be a factor, consumers seem not categorically averse to buying fat sale of Unilever Hellmann products grow. A variety of nonbuttery alternatives vying for toast topping privileges, including The fast-growing segment of the hummus. These are problems that would be powerless to resolve also Fabio flowing locks.

Maybe this is more a Unilever problem than a worldwide rout of margarine. While global sales of butter and spreadable oils ticked down in 2012, according to data from Euromonitor international, investment business margarine post - an increase of 1.1 percent. But sales is one of the largest U.S. brands of Unilever, I can't believe it's not butter, by 3.9 percent to $418 million.

Unilever Chief Paulus Gerardus Polman said last week earnings conference call, that rotate the spread business requires more than compete on price. "It's about the right taste," he said. "And it's about the perceived naturalness of our products." What Unilever sees, such as his "better-tasting products", such as Becel introduces gold, more markets and "do well", said Polman. The company plans to improve the marketing of its spread as "the healthy alternative to butter", he noted. Unilever does not respond to a request for comment.

Polman says he sees business improve the printed sheets so as it remains "a difficult market." So you dry oily tears.

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SBA Signs Memorandum of Understanding with the Asian Pacific American Chamber of Commerce and Entrepreneurship

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by Marie Johns, SBA Deputy Administrator

Created: May 30, 2013, 9:32 pmUpdated: May 30, 2013, 9:32 pm

As we mark the end of Asian-American Pacific Islander (AAPI) Heritage Month this May, the U.S. Small Business Administration (SBA) recognizes how important the success of America’s 1.5 million AAPI- owned businesses is to the strength of our economy. 

With more than 2.8 million workers, these firms are fueling job creation and strengthening our communities at a critical time in our economic recovery – and SBA is here to help them grow and succeed.

Four years ago, America’s small businesses and entrepreneurs were struggling in the face of the worst economic environment since the Great Depression – and a banking sector that was frozen.  Since that time, President Obama has worked to expand opportunities for AAPI business owners – particularly through increased access to credit.

And we’ve seen real progress.

We already know that SBA loans are three to five times more likely to be made to minority- and women-owned businesses than conventional small business loans made by banks.  And between January 2009 and March 2013, over $19 billion went to AAPI small businesses through 27,485 SBA loans.

We’ve also been working closely with our partners at the White House and throughout the Administration to reach more AAPI small business owners across the country - owners like Mei Xu, the founder of Chesapeake Bay Candles.

Mei’s is a classic story of American success.  In early 1994, she and her husband both left their jobs to follow their entrepreneurial spirits and establish Pacific Trade International and their premier brand Chesapeake Bay Candles.  They used an SBA loan in 1995 to invest in their business and scale their operations, and Mei recently opened Chesapeake Bay’s first American manufacturing facility in Maryland, which will employ over 100 people and produce 16,000 candles a day.   

At SBA, we’re constantly looking for more ways to help business owners like Mei, who have the creativity and drive to build a successful small business.  And while we’ve made progress, we know that there is more work to do.

Private sector partners like the Asian Pacific American Chamber of Commerce and Entrepreneurship (ACE) play a key role in connecting America’s entrepreneurs with the opportunities they need to start a business, or take an existing company to the next level.

Earlier today, I had the pleasure of joining ACE Chairman Bill Imada and members of the Chamber’s board to sign a Memorandum of Understanding between our two organizations.

This strategic alliance lays the groundwork for our future partnership and will ensure that entrepreneurs across the country have the tools they need to start and grow businesses and create jobs.

As President Obama has said, “The story of America’s success is written by America’s entrepreneurs; men and women who took a chance on a dream and they turned that dream into a business, and somehow changed the world.”

This memorandum brings us one step closer to helping AAPI men and women achieve this dream.

And together we’re building a more resilient and more inclusive vision of entrepreneurship – one that creates jobs and strengthens our economy nationwide. 

Marie Johns is Deputy Administrator of the U.S. Small Business Administration. She is responsible for management and oversight of the agency, and leads the agency’s efforts to reach underserved communities.Tags: Official SBA News and Views, Open For Business, SBA News and Views

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Take Time this 4th of July to Learn about SBA Programs & Initiatives for Veteran Entrepreneurs

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On this Fourth of July, as we celebrate our freedoms, I want share with you the ways SBA and the Office of Veterans Business Development are celebrating veteran entrepreneurs. 

The Administration and SBA are committed to ensuring that the federal government continues their dedication to our returning veterans.  As part of this, for the first time ever, in FY 2012 the federal government exceeded the three percent goal to contract with Service Disabled Veteran-Owned Small Businesses. Small businesses won a record $12.56 billion in federal prime contracts – an increase of more than $1 billion from FY 2011. This dollar amount represents 3.03 percent of all federal prime contractor spending.

This news is truly exciting, especially considering that nearly one in 10 small businesses nationwide is veteran-owned.  As a whole, these 2.4 million small businesses employ nearly six million Americans and generate more than $1 trillion in receipts. And, in the private sector workforce, veterans are 45 percent more likely than those with no active-duty military experience to be self-employed.

Additionally, SBA is working hard to improve access to capital for veteran entrepreneurs through the Veterans Pledge Initiative.   With the support of SBA’s top 20 national lending partners, and approximately 100 additional regional and community lending partners across the United States, SBA expects to assist an additional 2,000 veterans obtain loans to start or expand small businesses by increasing lending by $475 million over the next five years.

Veteran entrepreneurs can find more information about this initiative, and locate one of SBA’s 68 district offices here.  The site also identifies lending institutions participating in the veteran lending initiative. In addition, SBA has developed a checklist to assist veterans applying for access to capital. 

And, as we look at how to help those who are dreaming of owning their own business, SBA is laying down the foundation to help service members transitioning from active duty to learn more about entrepreneurship and franchising through its Operation: Boots to Business Program.  Many service members will apply the skills and experience they developed in the U.S. Armed Forces to their civilian communities as doctors and police officers, engineers and entrepreneurs.

Again, I wish you all a happy and safe Fourth of July as we celebrate our freedoms and the essence of what makes this country a great place to live and work as small business entrepreneurs.  

Rhett Jeppson is the Associate Administrator for SBA's Office of Veterans Business Development.Tags: Official SBA News and Views, Open For Business

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How to Up the Ante and Start Selling to Big, Corporate Clients

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by Caron_Beesley, Community Moderator

Created: December 27, 2012, 7:44 amUpdated: January 16, 2013, 1:24 pm

Want to secure your first million-dollar deal in 2013? Crossing that threshold will probably mean that you'll have to start selling to large corporate clients for the first time. It can be tough for small businesses, but not impossible. So what does it take? Here are some tips for upping your ante and selling to big, corporate customers.

Do Your Homework

Breaking into a new market or new client base requires planning. Start with identifying your new target market and then defining the value your small business can offer them.

Use online research to identify businesses that might be the right fit for your products or services. Specifically, try to identify potential weaknesses or threats they may be facing by reading press releases, reviews, media coverage, and financial reports. This will help you determine potential pain points. Check out what your target’s competition is up to – what are they doing that your target client isn’t?

Consider ways in which your business can help these prospects with their pain points and challenges. How can you help them succeed, be more efficient, save money or achieve their business goals? Don’t forget to assemble proof points and examples of how you’ve helped other (perhaps smaller) companies do the same.

Be Clear About Your Differentiators

Now that you know your target clients, what is it about your business that will make you stand out? Build a picture of your company – its culture, values, existing customers, products and services – and think about ways these combine to differentiate you. This blog can help guide you through this process: 5 Tips for Using Differentiators to Increase Your Small Business Sales.

Getting a Meeting

Getting that all-important first meeting will take time and there are many ways to go about it. Which combination of tactics will work really depends on who your customers are and what influences them. Which conferences/networking events do they attend? What information are they seeking online to help them make informed purchasing decisions (this will help define your web-based calls to action)? Which media do they read? You may also want to consider hiring a sales rep with experience selling to larger corporations.

Some techniques to consider include:

For the best result, integrate your chosen techniques so that your messaging and your end goals are consistent across each tactic.

Making Your Pitch

This is your chance to make your homework work for you. Concentrate on your prospect’s pain points. How can your business help them ease their problems? Your pitch should be less about the product and more about why you are different, the value you bring and how you can make your client’s life easier and more profitable. Remember, larger corporations can be reluctant to switch vendors and may think it risky to work with a small business, so it’s vital that your business case focuses 100 percent on why it makes sense for your client to make the switch from another vendor to you.

Be Prepped and Ready for Questions

Aside from the points you make in your pitch, one of the most effective ways to stand out from your competitors is to come ready and prepared for all questions. Your meeting may include senior management and staff from pricing, contracts, legal, operations and procurement, so expect a diverse range of questions about your product, pricing, and terms, and be ready to answer promptly and clearly. If you can’t, quickly state that you will get back to them with a response within 24 hours, or one business day.

Alleviate Any Concerns About Your Being a “Small Business”

Small businesses can be a risky investment for corporations. They may be worried you can’t scale to their production needs or that you may go out of business or be acquired during the life of the contract.

Don’t ignore this concern. Be prepared for it and use your pitch to emphasize the benefits of doing business with a smaller company. Stress your agility, responsiveness, ability to customize products, etc. Mention any partners that can fill gaps that may leave them vulnerable. Act like a larger business by having a product road map or timeline that clearly shows what will happen when and when you anticipate your client will start to see results. By doing so, you’re already starting to prove your value before a contract has even been drawn up.

Have you upped the ante and started selling to larger, corporate clients? Share your experiences below.

Related Blogs

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesleyTags: Community Blogs, Small Business Matters, Managing, Marketing

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