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Minnesota Business & Commercial Law Blog

What's an internship program?

Internships have been receiving special attention lately with the popular Robert Di Nero movie The Intern and a lawsuit brought against Fox Searchlight Pictures by former unpaid interns claiming compensation. Against this backdrop of entertainment and law, what is an internship? What are the expectations legally and from a work perspective?

WHAT IS AN INTERNSHIP?

The National Association of Colleges & Employers explains that an internship is a form of “experiential learning that integrates knowledge and theory learned in the classroom with practical application and skills development in a professional setting.

Financial concepts for small business owners

Minnesota business owners need to have a clear understanding of concepts such as budgeting, pricing strategies and cash flow in order to succeed. Some might think that they only need a business plan if they are going to seek equity or debt financing, but this is not the case. A business plan helps a new owner make a budget, set goals and estimate cash flow and is necessary to get a clear picture of how the companywill operate.

A budget is critical, but it also needs to be flexible and allow for the unexpected. It is likely to evolve over time. Understanding cash flow is also crucial. The most important aspect of cash flow is to make sure enough is coming in to cover what is going out. When this is not happening, a reassessment of pricing and other factors may be in order. Small business owners must understand how to set pricing in relation to expenses. It is also important to have a sense of how long it takes invoices to work their way through the system.

Having a gambler's outlook could help entrepreneurs

Most new commercial ventures fail within their first five years, and entrepreneurs in Minnesota and around the country are frequently warned that taking action without meticulous planning beforehand could be a recipe for disaster. However, some of the most successful business owners in America built their fortunes by ignoring words of caution and taking bold action whenever opportunities presented themselves.

Contradictory advice is not uncommon in the business world, and successful entrepreneurs are able to sift through the noise and focus instead on what could actually be of use. Technology has brought opportunities that would have been unimaginable just a few short years ago well within reach, and some business experts are encouraging entrepreneurs to adopt the strategies of casino gamblers in order to take advantage of this new paradigm.

Crowdfunding and commercial real estate investments

Commercial real estate investments have long been attractive to investors in Minnesota and around the country. Historically, only a very limited subset of the population was actually able to invest in commercial real estate because of the large buy-ins required to do so.

In 2012, the JOBS Act was passed by Congress. Meant to stimulate the economy, this law did many things, among them removing some of the restrictions on the advertising of securities offerings. In response, crowdfunding for commercial real estate investments became an option. This turn of events has allowed people to buy into the commercial real estate investment market with as little as a few thousand dollars as opposed to the many thousands that were previously needed.

The importance of data protection for Minnesota companies

One truth to both life and business is that issues will arise. While some can be planned for, others will rise up unexpectedly despite the most proactive of plans. However, including data protection as part of a comprehensive business plan may limit the disruption to both a Minnesota company and the people associated with it. Data protection is an especially serious issue for those running small businesses, as hackers and data thieves target them more frequently.

To stop an outside individual or entity from stealing personal or business information, a business owner must understand tactics used to gain that information. Phishing emails are a common tactic in addition to exploiting weak passwords used to secure devices. Making the decision to use devices that are not encrypted or allowing employees to bring their own devices can also leave a business open to data theft.

Commercial real estate prices may not rise this year

Minnesotans who either are thinking about selling commercial real estate or investing in it might be interested in learning about Morgan Stanley's prediction for U.S. prices in 2016. According to the company, it believes that commercial real estate prices will stay flat, experiencing no growth at all this year.

Morgan Stanley analysts based their prediction on a relationship between the value of the properties and lender practices. When prices go down, commercial real estate investors need to offset those drops. The zero growth rate prediction stands in stark contrast to the 5 percent growth rate that the firm had earlier predicted.

Minnesota startups and venture capital alternatives

Minnesota entrepreneurs who are looking to start new businesses may be interested to know that industry insiders say seeking venture capital may not be the best way to obtain funding. According to a member of a Southern California venture capital firm, out of the more than 1,000 proposals his company reviews annually it invests in less than a dozen. Entrepreneurs who want venture funding need to create workable business plans beforehand.

According to some data, only around 10 percent of seed funding originates as venture capital, and the majority of such funds are awarded to entrepreneurs who have previous successes under their belts. Several alternative sources account for the vast majority of startup money.

Online selling platforms for small business owners

Business owners in Minnesota who own brick-and-mortar stores may be able to augment their incomes and attract more customers by setting up an e-commerce site. E-commerce has been growing in popularity in recent years, as more and more customers choose online shopping for its convenience and time-saving potential. During the first quarter of 2015, U.S. e-commerce sales brought in $80.3 billion.

While a lot of small business owners see the profit potential of e-commerce, many lack the computer skills to create their own online store. These days, proficiency in computer coding and web design is not a requirement for launching a store on the Internet. There are numerous e-commerce platforms available to small business owners that can provide detailed website templates for selling goods and services.

Minnesota commercial property could become harder to finance

The interest rate increase that was announced by Janet Yellen, the chair of the Federal Reserve, was the first hike since 2006 and is expected to tighten the lending environment for commercial real estate investors. The target range for interest had been 0.0 percent to 0.25 percent. Now it stands at 0.25 to 0.50 percent, and experts predict that the Federal Reserve could impose more interest hikes in the future.

These small percentages could still have a noticeable effect on commercial real estate because of the large sums of money involved in financing commercial properties. People preparing to finance a commercial property will now face more expensive loans. Other factors besides the interest rate increase could have an effect on commercial real estate.

New Year's resolutions for small businesses

As the start of every year, many people are thinking about the goals that they want to accomplish in their personal lives. Similarly, small businesses in Minnesota can list out their goals for the new year. However, there are a few resolutions that companies can make to spur growth and further success in 2016.

All small businesses benefit from determining a niche for their products or services. They can make more money and compete against fewer rivals this way. Existing small businesses should also determine the products or services that turn a profit, which provides financial security for the long run, and focus on attracting and keeping customers who have the capacity and need to make repeat purchases. Additionally, they need to manage their money by regularly evaluating losses and profits, aging accounts and cash flow. Opening a reserve account with a few months' worth of operating expenses can help during sudden drops in cash flow.

Commercial real estate loans draw increased scrutiny for banks

Banking and real estate problems of recent years may be fresh in the minds of Minnesota residents. Those involved in commercial real estate activity may want to be aware of banking regulators' plans to pay closer attention to lending activity in 2016. A Dec. 18 announcement noted that there is a high level of concern because there has been a significant increase in lending with less stringent standards in 2015. This could threaten the health of the banks involved in activity that is considered to be riskier.

Various agencies indicate that commercial real estate loans have been underwritten with relaxed standards in recent times. Additionally, there have been observations of exceptions to underwriting policies being made. The agencies also note that the banks in question are failing to monitor market conditions sufficiently. The primary area in which underwriting standards have been looser is the commercial sector. The concern is that both the national economy and the stability of the banks could be negatively affected if these practices are not changed.

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