How to Start an Online Business

Starting an online business can seem like a daunting task, but it doesn’t have to be. In order to be a successful business owner, organization and careful planning are necessary components. To begin, you need to find a need and fill it. In other words, you need to find a market before you find a product. You need to zone in on a group of people who are searching for a solution to a problem, but are unable to find any results. If your business can be the one to offer the result, success will follow. Some quick online research will help you identify a niche market. Check out your competition’s websites to learn what solutions they’re offering and then devise a more efficient way to do things. You can also benefit from performing keyword research to find keywords a lot of people are searching, but for which not many sites are competing. Consider visiting online forums to see what people are talking about and what kinds of questions they are asking one another.

Once you have established your market and your product, it is time to create successful and compelling copy. The copy on your site is vitally important. You want to create effective content by instilling a sense of urgency. You need to arouse interest and explain how your product can help solve the customer’s problem or make their lives easier/better. You need to establish your credibility, so the consumer feels comfortable doing business with you. Testimonials are a great way to showcase how your product has helped individuals in the past. Once you have made a strong offer and created urgency, it is time to ask for a sale. Keep in mind you should devise your copy even before you build your website. Although the design of your site is vitally important, people will want to know what’s in it for them and that can only be explained via your content.

Build Your Website and Drive Traffic

Once you have identified your market and your product and written your sales-focused copy, it is time to design and build your website. A good rule of thumb when it comes to website design is less is more. You have fewer than five seconds to grab someone’s attention, so you want to keep your design as simple and sleek as possible. Keep in mind your site is your online storefront, so you want to make it easy for potential customers to buy. Choose easy-to-read fonts on a neutral background and keep the navigation bar simple and uniform across all pages. Streamline the buying process so customers are not confused or overwhelmed and give up halfway through.

A beautiful website only goes so far. If you don’t have people coming to your site, your online business will struggle to get off the ground. You can use search engines to drive targeted buyers to your site. One of the most common ways to increase traffic is through pay-per-click advertising (PPC). Instead of waiting for traffic to come to your site organically, PPC takes a more aggressive approach. Your PPC ads will immediately show up on the search pages and you will have the opportunity to test different keywords, headlines, and selling approaches to see which are most effective. Once you have identified your highest-performing keywords, you will be able to incorporate them into your copy and code — hopefully boosting your rankings in organic search results.

How to Maintain a Successful Online Business

If you have successfully completed the aforementioned steps, you may be wondering how to maintain consistent business. In order to establish yourself as an expert in your market, you need to build a solid reputation. If you provide useful information for free on other sites, you will see more traffic and better search engine rankings for your site. Become an active member on social networking sites where your target audience hangs out or establish yourself as an expert in industry forums. Be sure to always link back to your site for each tidbit of information you provide.

You can use an email marketing campaign to turn visitors into buyers. When customers willingly sign up for emails, you instantly have a captive audience. The response from email marketing is completely measurable and much cheaper than marketing on TV, radio, or in print. Plus, you’re developing a long-term relationship with your customers. You want to establish the lifetime value of a customer. The first sale is by far the hardest, so you want to use techniques such as back-end selling and upselling to keep them coming back for more. Send out coupons, suggest related products, or highlight products that complement their previous purchases. If you reward your customers for their loyalty, they will become even more loyal as time progresses.

By following these basic guidelines, you should be off and running in no time. The internet changes in the blink of an eye, but the principles of how to start and grow your online business remain the same. Stick to the basics and success will follow.

What Do Credit Score Ranges Mean?

What Do Credit Score Ranges Mean?

Like it or not, your credit score has power over your finances which in turn affect your quality of life. Everyone has a credit score, even if they have never signed up for a credit card in their life. While it may be less work to just pay your bills on time and hope for the best, constant credit monitoring can help borrowers stay on top of their credit, spot mistakes and identify areas where they can improve. A great place to start is by understanding the varying credit score ranges and what they mean to lenders.

Different Rating Systems

While the FICO credit score may be the most popular, there are other credit rating scales in use. For example, while the FICO score measures credit histories on a scale of 300 to 850, the PLUS score measures from 330-830. The TransRisk Score measures from 100 to 900 and Equifax Credit scores range from 280 to 850. (reference: What is a Good Credit Score)

Before you start comparing your score to the range descriptions listed below, know which scale your score is being measured on for an accurate picture of your current credit placement. Going forward, this guide will use the FICO credit score range as the basis for explaining the different types of credit scores and what they mean.

Excellent Credit: Score Ranging from 720 to 850

Borrowers with excellent credit portray a long, varied history of paying bills on time, in full and maintaining a low balance on all credit
accounts. These borrowers pose the lowest risk to lenders, so are considered for only the best interest rates and loan benefits.

Good Credit: Score Ranging from 690 to 720

Borrowers with good credit may be in the process of building to an excellent credit score. They also practice paying off credit card balances and keeping their utilization rate low, for the most part. Lenders view these consumers also as low-risk, so they may qualify for the loan terms and interest rates they prefer as well.

Fair Credit: Score Ranging from 650 to 690

When a credit score falls into this range, it’s clear to the lender that the borrower has struggled in the past. They may have missed a series of payments or have extremely high balances on one or more credit cards. They might have defaulted on a loan or inquired for too many lines of credit in a set period of time. Lenders are more hesitant to provide additional borrowing options to these types of consumers and if they are approved, the credit may come at a much higher interest rate.

Poor Credit: Score Ranging from 350 to 650

When a credit score is this low, it’s time for the individual to take drastic steps to rebuild. Maybe they filed for bankruptcy in the last 10 years. Perhaps they defaulted on multiple loans or experienced a foreclosure. At this stage, it’s best if they speak with a qualified professional who can offer them situation-specific advice on how to overcome this hurdle and begin raising their credit point by point. Lenders will most likely deny the application of these borrowers based on the high level of risk that cannot be ignored.

Individuals with credit scores in this range have limited options for loans. Those seeking credit-building financial options might consider bad credit loans online through a loan broker who pairs prospective borrowers with reputable alternative loan companies.

Limited or Non-existent Credit History: Score Ranging from 300 to 349

If a borrower has never taken out a loan or credit card, it’s feasible that their score will barely even rank. The good news is these borrowers can start small, using merchandise store cards and other secured loan or credit card options to gradually establish their own personal credit history.

It’s time to check your credit score and see how you rank. Head to and access one of the three free credit reports available to you every year. Take your credit seriously and you’ll see the payoff down the road – you may even save hundreds of thousands of dollars in interest over the course of your lifetime.

The Current Status of Greece’s Economy

Greece, Its Future in the Euro Zone, and What it Means for Everyone Else

It seems like all the western world has its eyes fixated on the debt crisis that’s apparently tearing Greece apart and has the rest of Europe at the nation’s throat.

On one side, you have Greece struggling to get its economy back in shape and pay its obligations—first to creditors, and then to citizens who have come to expect benefits from the government. On the other side, the European Union, led by Germany, fears the dissolution of the Euro zone and the world’s economy unless Greece pays back its debts and initiates stringent austerity measures that would significantly cut down the government expenses it’s determined to keep.

A lot is at stake, although there is uncertainty as to the extent of each side’s apocalyptic predictions of what will happen if their will is not carried out.

What exactly is the Greece debt crisis and what does it mean for the rest of the world? And what’s the current outlook on the situation?

How Did We Get into this Mess?

Although Greece’s own policies are the chief cause of its current situation, the reason it has international ramifications is in large measure due to the weakening of the world economy following the 2008 Global Financial Crisis. Many European banks are weak and on the verge of failing just as many American banks weakened and collapsed.

In a situation similar to the investment in toxic mortgage-backed securities that contributed to the Great Recession in the United States, many European establishments have invested in securities like public debt, as well as securities secured by things like pension funds.

Because these European banks have a lot invested in Greece, Greece’s default on its debt would make these securities worthless and deal great blows to the financial institutions that have invested in them. Normally, this is part of the game of lending: lenders are supposed to screen their debtors wisely. If they loan money or invest unwisely, they lose their money. That’s capitalism. However, the problem is that these financial institutions are extremely large. Much like the American banks that had to be merged or bailed out, they are deemed “too big to fail” because it is perceived that their collapse would have dire ramifications throughout all Europe. The economic shockwaves could reach to all parts of the world.

Additionally, Greece defaulting would require its exit from the Euro zone as it would go back to its own national currency. This would give way for other nations to do the same, possible leading to the dissolution of the Euro zone. Many feel this would be a step back for international politic in the region.

Greece vs the Rest of Europe

Greece has received numerous bailout and imposed cuts to its welfare programs, pensions, and government salaries. This has helped it pay off its obligation in part, but has also hurt the nation’s economy, as it has reduced purchasing power. And even with these measures, the country is still not able to pay off its debt and is on the verge of defaulting.

The rest of Europe, led by Germany, are willing to give Greece additional bailout money, but only if it imposes greater austerity. Greece argues that this would harm their economy even more.

Current Status

Presently, the conversation is closed in gridlock. If action isn’t taken soon, Greece will default and it will be left to see whether the fears of the European community are realized. Defaulting would actually help the Greek economy, but could prove detrimental to the rest of the world.

What Are Term Sheets?

What Are Term Sheets?

A term sheet is a fairly straightforward concept: it’s just a bulleted list outlining the terms and agreements of a business proposal.

It’s sort of like a non-binding rough draft version of the agreement. Once the term sheet is edited and executed, it’ll be used as a road map for legal counsel to draw up a more detailed proposal of the final agreement.

In trying to reach an agreement between separate parties in business, a term sheet is used to get everyone up to speed on the proposed points of the deal. It’s used to prevent misunderstandings and misapprehensions, and to negotiate points of the terms before the final version is drafted and proposed.

The Benefits of Using a Term Sheet

It’ll save you money in legal fees.

Rather than paying your legal team to draw up binding contracts that the other party could reject or want to amend, it’s smarter to create a non-legally binding (and free) document that both parties can go over together to ensure that all the details are correct before spending the money to have it legally executed.

It’ll prevent misunderstandings between the involved parties.

The purpose of the term sheet is simply to provide a general outline of the proposal. It doesn’t need to go into the details (that’s what the legal team is for) but it does need to provide a complete list of what’s to be expected. Getting everyone on the same page prior to the signing of the contract is critical if you want to avoid tensions and the threat of legal action further down the line if someone disagrees about what the proposal entailed. You’ll have the paper process right in front of you- from the first term sheet to the final legal document. Terms sheets protect everyone involved, and give you time to discuss the proposed terms.

It’ll save you time.

Rather than complicated presentations, multiple excessively-detailed legal documents, and confusing phone conversations that repeat the same points again and again, a term sheet is a clean, simple, and concise method of conveying the terms of the agreement and outline the proposal. Term sheets are just a more effective way of communicating, and keeps the conversation on track.

You’ll be able to nail down the most important aspects of the agreement with a term sheet.

Rather than hyperfocusing on the less-important details (as tends to happen when you sit a group of people down to agree on anything) a term sheet forces everyone to look at the big picture first. This will keep everyone focused on the main goals that the term sheet proposes, and the details will be easier to agree upon later once the main objectives are 100% clear and in writing. That’ll also help the legal department understand what it is you’re hoping to achieve through the term sheet, and will apply that knowledge when drawing up the finalized legal documents.

Who Are Term Sheets For?

Terms sheets are most often used in meetings with angel investors or venture capital investors. When term sheets are used to convey important information to potential investors, there are typically three sections involved, according to MaRS Library:

  1. Funding
  2. Corporate governance
  3. Liquidation

There are sample term sheets that you can reference online when considering what information to include on a term sheet that you’d want to present to your potential investors, or if your venture capital investor hands a term sheet to you. Often times, term sheets are riddled with legalese or excessively complex business terms. Don’t let that intimidate you. Because term sheets are non-binding and informal, there’s no reason not to write out your intentions in everyday English.

Venture Beat suggests checking for four key elements to review in any term sheet that’s given to you by a potential investor:

  1. Valuation (price per share)
  2. Liquidation preference
  3. Founder vesting
  4. Board structure and composition

Again, these are just some key points that you’ll want to cover in the early stages of your term sheet. Be thorough and take your time, then sort out the smaller specifics with the guidance of your legal counselor. Overlooking something could lead to a trainwreck when it comes time to put the final agreement into action. Ask yourself every possible “what happens if…” and you’ll be in good shape.

When You Come Across the Need for Term Sheets, Will You Be Ready?

Prospective venture capital investors will want to know what you have to offer them, as well as how their relationship with you will be defined. You want to know the same thing. That’s where a term sheet comes in handy. It allows you to examine what you both want out of a partnership, and to edit the minutia to better serve your individual needs in the deal.

The important thing to remember when reviewing or drafting term sheets is to cover all your bases, but avoid unnecessary details. Save that for the final proposal. Keep your eye on the bigger picture, and investors will be more likely to see your vision for the partnership, and feel more comfortable investing in you.

Whether you’re a newly minted entrepreneur just gaining traction or an aspiring venture capitalist yourself, mastering the art of the first-draft term sheet takes a little practice. When looking at term sheets templates, try to be more like the examples that are driven, clear, and less formal. Write a solid term sheet in straightforward plain English, and you’ve got an outline for a business agreement that could benefit you for years to come!

Pros and Cons of Being Self Employed

Pros and Cons of Being Self Employed

For some people, the idea of being self employed seems like the perfect work situation. And while it definitely has a lot of perks, there are some things to be aware of before you decide to quit your job and go it alone.

Pros of Being Self Employed

Working from home? Making all the decisions for the business? Skipping the long commute? These are just a few reasons why someone would want to run for the relative safety and security of a full time job and being self-employed. Anyone with a good idea, a lot of drive and motivation, and some support (financially and emotionally) can start their own business and even if their income isn’t much more than a trickle to start, sometimes the pros of being self employed make up for it.

  • Flexibility in work schedule and location
  • You’re the boss and the one making decisions
  • Any profits go directly into your pocket
  • Ton of tax deductions to take advantage of
  • Can focus on doing what you love
  • No danger of being fired or laid off

The bottom line is the harder you work, the more successful you’ll be. And while working hard for someone else is a good way to keep a job, you don’t always see the fruits of your labor reflected in your pay check.

Cons of Being Self Employed

Like a coin, there is another side associated with being self-employed. While the freedom of being your own boss can be great, there’s something to be said for clocking in your 40 hours a week, going home and relaxing in the evenings and weekend, and collecting your paycheck once every two weeks. Some people just aren’t cut out for the instablility, insecurity, and stress of working for yourself. When you look through the cons of being self-employed, ask yourself, “Could I handle this?”

  • Taking on the risk of starting a new business or venture
  • May need to use your own money or get a loan to get started
  • Lack of benefits such as vacation time, sick days, and health insurance
  • You’re the last one to be paid in most cases
  • High stress and long hours
  • You’ll wear many more hats–from bookkeeping to tax consultant
  • Lack of regular income

The pros and cons of being self employed are pretty obvious. Whether you can succeed at running your own business isn’t always so clear. Certainly there have been people with the money, support, and experience who have started their own businesses and failed. On the other hand, there are always successful stores or restaurants owned by individuals that are wildly successful, but disorganized and poorly run.

It seems that when it comes to the pros and cons of being unemployed, there are several other elements out of your control that will help determine whether or not your business sinks or swims.

BPO Trend Spotting – “Nearshoring”

For major U.S. corporations looking to outsource non-core business processes, the selection of BPO partners with call centers or IT operation centers in Latin America and the Caribbean is not new. However, the “pitch” that having these operations in a time zone more convenient to the U.S. was never compelling enough to warrant the higher cost relative to the options available in southeast Asia. But things have changed – specifically, India is no longer so cheap as it once was. American firms are finding that native proficiency in languages such as Italian and German, as well as Spanish, coupled with the closer proximity to headquarters are some of the benefits that client corporations can obtain from “nearshore” BPO.

According to Tholon’s 2013 “Top 100 Outsourcing Destinations”, Colombia has been realizing its real-world potential as a viable destination in the region for IT BPO services. Bogota, Medellin, Cali, and Bucaramanga all ranked among top cities for outsourcing on this year’s list. Colombia’s progress is attributed to the unwavering support from its industry and government stakeholders to promote Colombia as a global IT-BPO destination. Moreover, Colombian industry leaders have done well in collaborating with large Western providers in setting up operations in the country. “Invest in Bogota” extended its support to Convergys when it needed bilingual speakers. Aravato Iberia has just started its back-office operations in Bucaramanga, creating 1,000 jobs in the city.

Uruguay’s Montevideo was another fast moving destination in the region. A small outsourcing destination which has long proven its strength in ITO services, Uruguay has maintained a vibrant, yet stable business ecosystem – establishing itself as a seemingly more predictable alternative to Argentina and Brazil. Ongoing support from local stakeholders and promotion agencies, a maturing ITO sector and increasing interest by regional and American providers in the country, should propel Montevideo in coming years.

San Jose, Costa Rica has also been one of the most impressive destinations in the region, becoming a fast-growing hub for IT operations. A significant catalyst for this has been the sustained government support in promoting the local IT-BPO sector.

M&A Activity Heats Up in the BPO Space

As the economy strengthens and businesses expand, demand has increased for Business Process Outsourcing (BPO) services. This trend, paired with a lower cost of capital for would-be acquirers has resulted in a spate of transactions in recent weeks.

Accenture (NYSE:ACN) announced on October 3rd that it will acquire Procurian, a leading provider of procurement outsourcing services, for $375 million in cash. Procurian is a specialist in providing comprehensive procurement solutions to large corporate clients from locations in the US, UK, India, the Czech Republic, China and Brazil. Procurian’s revenue was reportedly $142.6 million for the twelve months prior to the deal, indicating that Accenture paid up for the transaction.

The acquisition of Procurian enhances Accenture’s leadership in the procurement outsourcing space – a position that was strengthened in late 2010 when the firm acquired Ariba’s sourcing and BPO services assets for $51 million. Accenture has now announced 13 acquisitions this year.

Pactera Technology International Ltd , the largest technology outsourcing firm in China, announced in mid-October that is has agreed to be taken private by a consortium led by Blackstone Group LP for $625 million. Beijing-based Pactera was itself formed just last year through a merger of HiSoft Technology International Ltd and VanceInfo Technologies Inc. Pactera offers technology outsourcing and consulting services to companies worldwide.

On October 22nd, Progressive Medical and PMSI announced the successful completion of their merger. The combined company will provide best in class pharmacy benefit management, medical equipment services, home health care, transportation, and Medicare compliance solutions for workers’ compensation and automotive accident claimants. Progressive Medical is a leading provider of services associated with workers’ compensation-related medical claims.

R&D conference at MIT Features Presentations by Leading Experts

Please consider participating as a start-up exhibitor in this year’s MIT R&D conference, November 13-14, 2013. The conference features research presentations by leading experts and provides opportunities to network with MIT faculty and industry executives. In addition to general sessions, attendees will choose among multiple concurrent tracks with themes that include:

  • Critical Materials
  • Manufacturing
  • Water
  • Solar Power
  • Safety Risk and Quality
  • Advanced Urbanism
  • Cognitive Computing
  • Nano Materials, Structures and Systems

A segment of the conference’s agenda will be dedicated to showcasing innovative products developed by MIT-affiliated start-ups. Specifically, they are looking for start-ups that meet the following general guidelines:

  • Have an MIT affiliation*
  • Are developing a tangible good (no content, software companies)
  • The tangible good must be demonstrable on site (no videos, please)
  • The demonstration must illustrate the utility of the product

Please submit if you feel your start-up fits these general guidelines. To submit, simply go to The application will take less than 5 minutes.

For more information, contact:

Enrique S. Shadah

Senior Industrial Liaison Officer

MIT Office of Corporate Relations/ Industrial Liaison Program


When a Non-binding Term Sheet Becomes Binding

From Mintz Levin

By Robert Burwell, Meryl Epstein, Christopher Lhulier, and Howard Miller

July 8‚ 2013

Tire-kickers, prevaricators and those who might otherwise agree on a term sheet with little intention of closing the deal beware: A “non-binding” term sheet is sometimes binding. At least so says the Delaware Supreme Court. In SIGA Technologies v. PharmAthene, Inc., No. 314, 2012 2013 Del. LEXIS 265, 1-2 (Del. May 24, 2013), Delaware’s highest court held that where a party to a detailed term sheet breaches its duty to negotiate in good faith, the spurned party may be entitled to recover an award of so-called “benefit of the bargain” contract damages. In such a case, the breaching party would be required to pay the non-breaching party an amount equal to the value the non-breaching party could have reasonably expected to receive under a definitive agreement having the same terms as set forth in the term sheet. This alert discusses the SIGA case and proposes ways to mitigate the risk that a court might award expectation damages based on a “non-binding” term sheet or letter of intent.

SIGA Technologies v. PharmAthene, Inc.

In SIGA, PharmAthene — a pharmaceutical company specializing in “biodefense” against chemical weapons such as anthrax — sued to enforce a term sheet for a license agreement with SIGA. The relationship began like many drug development collaborations: SIGA had acquired an untested, unproven treatment for smallpox, but it had limited resources. As a result, it sought funding, ultimately entering into discussions with PharmAthene to help it finance development of the product. PharmAthene proposed a merger of the two companies but SIGA, although cash strapped, was hesitant. The parties nonetheless negotiated and agreed on a definitive merger agreement and a similarly detailed term sheet for a license agreement just in case the merger fell through. During the negotiations, SIGA asked PharmAthene for a bridge loan to cover SIGA’s ongoing development costs. PharmAthene agreed to the loan on the condition it would, at minimum, receive a license for the product. Both the bridge loan documents and the merger agreement included language confirming that if the merger fell through, the parties would

negotiate in good faith with the intention of executing a definitive License in accordance with the terms set forth in the License Agreement Term Sheet attached. . . . (SIGA, 2013 Del. LEXIS 265 at 13.)

Before the parties concluded a merger, SIGA secured over $21 million in grant money from the National Institutes of Health to complete the product’s development. SIGA then terminated the merger agreement when the “drop dead” date came before the merger could be consummated.

After the announcement, PharmAthene sent SIGA a proposed license agreement consistent with the license agreement term sheet. SIGA rejected the license agreement and tried to renegotiate significantly more favorable terms. Negotiations broke down, and PharmAthene sued.

The SIGA court held that expectation or “benefit of the bargain” damages would be an appropriate remedy where (1) the parties memorialized the basic terms of a transaction in a term sheet; (2) the parties expressly agreed to negotiate in good faith a final transaction in accordance with those terms; and (3) but for the breaching party’s bad faith negotiations, the parties would have consummated a definitive agreement having the terms set forth in the term sheet. See SIGA, 2013 Del. LEXIS 265 at 52. Benefit of the bargain damages are meant to compensate a party with what it would have received had the contract been finalized and fully performed. It is usually measured in terms of reasonably expected profits. The reliance measure of damages, in comparison, provides reimbursement to the non-breaching party for expenses it incurred in reliance on the contract.

The SIGA court’s decision is notable for the remedies it contemplates, i.e., expectation damages, not for its determination that a party can be held liable for breaching a duty to negotiate in good faith. Numerous courts have recognized a cause of action for breach of a duty to negotiate in good faith.1 In fact, at least one California court has gone so far as to recognize a cause of action for breach of the implied covenant of good faith and fair dealing in a case where the parties’ term sheet did not expressly impose an obligation to negotiate in good faith. Copeland v. Baskin Robbins U.S.A., 96 Cal. App. 4th 1251 (2002). But these prior court rulings have typically favored reliance, not expectancy damages.2

For the rest of this article, as well as recommendations and proposed language, check out the Mintz Levin newsletter at the link below:

Article: When a Non-binding Term Sheet Becomes Binding

Entrepreneurs need not apply: Companies shun the self employed

In this economy, some unlucky workers are getting snubbed—twice.

Recession prompted millions of laid off workers and new graduates to jump into self-employment—some with enthusiasm and others with reluctance because they couldn’t find anything better. Now, according to new research, it seems they aren’t wanted back.

That’s only ironic because company executives and human resources say they want self starters, innovative hires, a certain entrepreneurial spirit.

Entrepreneurs and freelancers attract fewer interview invitations than comparable candidates who have spent the last few years working for someone else, according to research which will be presented to the Academy of Management annual conference in August. In the UK, the self-employed received almost two-thirds fewer interview requests than people with similar professional experience who worked only at employers.

“The choice to become an entrepreneur can result in an involuntary lock-in, a factor that should be taken into account in planning one’s future career,” wrote the five professors from the University of Vienna, Munich School of Management and Erasmus University Rotterdam.

Men who were self employed fared far worse than women at landing job interviews, a difference the researchers cannot explain but say they hope to look into later.

The stigma against the self-employed may indicate that hiring managers just don’t see them as a good fit in their corporate culture. Traits that work for start-ups—risk-taking, taking charge and adopting “unusual points of view”—don’t necessarily work well in corporate careers, the paper noted.

“My hunch is that many entrepreneurs would actually not fit very well into established organizations, although they may be very productive and able managers themselves—as long as they don’t have a boss,” said Philipp Koellinger, an associate professor of economics at the Erasmus University Rotterdam, and one of the study’s authors. “Employers may attach that stereotype to everyone who was self-employed.”

He estimates that approximately one in seven entrepreneurs who started their businesses in the last four years did so because they couldn’t find jobs, and his previous research shows they are considerably less satisfied with their start-up than others. (That 2008-2009 research was called ”I Can’t Get No Satisfaction.”(abstract))

In the latest experiment, researchers sent pairs of cover letters and fictional resumes to real human resources management jobs in the UK over two years. In both fictional candidates’ CVs, the skills and training in the first seven years of the “applicant’s” careers were the same, with experience at large- and mid-sized companies. The key difference showed up after 2009: One of them was said to have owned a small HR consultancy with three employees while the other worked in a company’s HR department consulting with different groups.

The latest findings sound a lot like discrimination—except freelancers or consultants have few protections. Judging by a similar reception the unemployed have received, it’s likely best for applicants to sell their entrepreneurial spirit more than the actual record.

Follow Vickie Elmer on Twitter @WorkingKind. We welcome your comments at