Highlights of the December 2005/January 2006 Issue of FSB: Fortune Small Business

COVER STORY
Hidden Risks, by Anne Fisher, page 44
Franchising is an economic behemoth in the U.S., encompassing at least 250,000 individual businesses in more than 70 industries. It's also a much more perilous proposition than most people realize, probably even more risky than starting a company from scratch. The bigger the franchise company and the longer it has been around, the more likely it is to have an established name brand and proven systems for generating profits. But stellar brands carry big price tags, so typical franchisee wannabes frequently find themselves signing on with smaller, lesser-known organizations. But as Anne Fisher reports, these may or may not have a clue about how to help operators—who often find themselves faced with hidden roadblocks once they start their business—make money.

NEWS AND TRENDS
A Hidden Tax on Small Business, by Brian O'Reilly, page 23
The alternative minimum tax, originally aimed at 200 wealthy families, is expanding to hit millions of Americans, including entrepreneurs, whom it strikes harder than wage-earners; successful entrepreneurs tend to earn more and 90% of small businesses have their profits taxed as personal income, regardless of how the firm is organized. Brian O'Reilly reports on why the tax is unlikely to be abolished anytime soon—and how small businesses can avoid some of its pitfalls.

OWNER'S MANUAL
Hire Education, by Norman Cloutier, page 83
After 25 years of building businesses and recruiting employees, Norman Cloutier mastered a number of ways to seek out the best talent. "I've long believed that 90% of coaching is hiring," he says. "If you start with good people, they will do good work and accomplish more, with less supervision." Cloutier—who says he "takes an unusual view of what makes a person qualified for a job"—shares his insights about hiring with FSB.

SECURITY
Data Lockdown, by Ron Stodghill, page 87
A recent survey estimated that almost two million Internet users in the U.S. inadvertently gave personal information to cyberscammers last year. Increasingly the weapon of choice for scammers is a "phishing" expedition, in which a con artist poses as your bank and asks for confirmation of details such as your account numbers and passwords. Such attacks cost credit card companies and banks some $1.2 billion in 2004. A small technology firm came up with a solution to stop phishing attacks years ago, but only recently has the market come around to the login security pass that Vasco Security has been selling for nearly a decade.

INNOVATION
Blogging for Dollars, by Justin Martin, page 89
The blogosphere is a vast, unruly, and totally tantalizing mother lode of unvarnished consumer opinion on just about every product and service. But to find out what the masses think about a product, a company would have to dig through 350,000 fresh daily postings on a staggering 20 million blogs worldwide (90% of them are based in the U.S.). And that's just the beginning, as roughly 50,000 new blogs are launched each day. Justin Martin looks at how Umbria, a market research firm in Boulder whose software finds useful consumer intelligence on the Internet. "The blogosphere is overflowing with brutally honest opinion," says Umbria CEO Howard Kaushansky. "Our goal is to track those opinions down."../../p>

LOCAL COLOR
Sunken Treasure, by Lindsey Gerdes, page 104
When George Goodwin went fishing in shallow Florida riverbeds in the early 1970s, he often caught more logs than fish. The logs he came across, known as deadhead logs, are centuries-old cypress and pine felled in the 1800s by loggers who would float them downstream to the nearest mill. But often the heaviest logs—those filled with the most resin—sank. Though the outside part of the log decomposes after being underwater, the inside is preserved. This "heart pine" and "heart cypress" is now prized for flooring and paneling. And Goodwin, who spent his entire savings of $105,500 to start his first mill, now runs a $3-million-a-year business selling wood from sunken logs.

OFF HOURS
Indie Caribbean, by David Whitford, page 112
FSB senior writer David Whitford visits the Coco Palm, a new resort hotel on the northwest coast of St. Lucia, near Gros Islet in the Caribbean. A poolside restaurant, swim-up rooms, a Montessori school for the children of guests, and a premium on service are just a few of the hotel's many attractions. It also has no front desk, to avoid making guests wait in line when they arrive, and it encourages them to mingle with the locals.

PLUS:
How it Works Some small companies manage to profit from the Hurricane Katrina cleanup. Big Picture A Boston entrepreneur opens an Egyptian fun house. Inspire It is a mistake to leave idea generation up to your imagination. Frontlines New hires are expected to shake up the business—not the owner. Drinks With.Boone Pickens The oil tycoon eyes his next big splash: water rights. My Favorite A pair of innkeepers shoot the breeze about weathervanes. Enthusiasms An investment advisor spreads the hot news about wasabi. Wheels The hydrogen-fueled Honda FCX is a gas, but it costs $1 million. Gear Skis, hats, and other cool winter equipment made by small firms. The Edge Why use new tracking technology merely to save lives?

For further information please contact:
Susan Brown Williams
212-522-0133
susan_williams@timeinc.com