News digest: Guitars, audits and family biz


Staying on top of   the news  can be a time-consuming task. SmallBusinessChicago has scoured various news outlets  to bring you current  summaries of business stories  with local relevance:

David Kalt
David Kalt, owner of the Chicago Music Exchange. Photo courtesy of Chicago Music Exchange

Things you can t trade on Wall Street.

Chicago entrepreneur David Kalt, 43, wants to expand the vintage guitar market by setting up an exchange allowing the instruments to be bought and sold online, the Bloomberg news service reportedMonday. Kalt is a former stock and options trader who started optionsXpress. That company, which  went public in 2005, provides an online platform for options trading. Now Kalt owns the Chicago Music Exchange and wants to apply a similar model to guitars. I want to document the aesthetics of particular guitars and use serial numbers and database technology to create an exchange where you can buy and sell guitars all over the world, he told Bloomberg.

How a financial  audit can save money.

When applying for a loan, consider having your financial statements audited ahead of time by a certified public accountant. That’s the advice gleaned from  an article in Thursday Wall Street Journal. The article  cited a new study by the University of Chicago Booth School of Business that found audited businesses face interest rates  that are more than half a percentage point lower than those offered to nonaudited businesses, saving them an annual average of $6,900 for every $1 million in  debt.   Audits provide good information. The more concrete information a lender can get, the better, Tom Burke, director of Wells Fargo Small Business Administration lending division, told the Wall Street Journal. Burke added that businesses with less than $1 million in annual revenue should opt for a compilation ” a less expensive, unaudited statement prepared by a CPA.

All in the family.

Most family-run businesses plan to focus on technology, staff and sales this year, according to New York City-based PricewaterhouseCoopers November 2010 Family Business Survey, as reported in the Wall Street Journal’s print edition this week. Of the 89 companies surveyed, eight out of 10 said they planned to  invest in  information technology infrastructure, human resources and employee training, and sales activity. Nearly three-quarters said they planned to  improve or expand their marketing efforts. And about  12 percent of companies surveyed said they intend to significantly modify their business strategies because of the economic crisis, according to the report.

— Compiled by Hallie Busta