spark of success Jen Aronoff

The owner of a swim instruction business seeking advice on opening his own school. A family-owned ticketing-services company with expansion in mind. A lawyer looking to change careers and her life.

They're all in town until Saturday -- along with hundreds of others like them, bound by a desire to succeed -- for the Black Enterprise Entrepreneurs Conference & Expo.

In its 13th year, the national conference headed to Charlotte for the first time, drawing 1,500 men and women, from aspiring entrepreneurs to CEOs. About 200 are from Charlotte; the rest are from across the country.

Attendees have gathered to network, chat and search for ideas and connections that could spark future plans.

The event revolves around discussion and advice from business leaders. But it also includes a forum on the challenges facing African Americans, a gospel concert featuring Kirk Franklin, morning workouts and programs on kids' and teen entrepreneurship and charitable work.

For extra motivation, businesspeople such as Chris Gardner, author of "The Pursuit of Happyness" and inspiration for the Will Smith-starring movie of the same name, were on hand to speak.

Thursday, executives shared their thoughts on finding money to fund a business in a challenging economy and building a business so it can weather difficult stretches -- practical advice those in the crowd said they found useful. Convention in Charlotte

Back up ideas

The most common mistake entrepreneurs make looking for capital: Not knowing how much they need to be successful.

Don't look to a bank to tell you, either -- you need to figure it out yourself, with help from trusted advisers. If you qualify for a loan, be prepared to personally back it. And be confident: "If you're uneasy about the potential success of your business, then I ought to be also."

"Everybody I meet is a potential investor," said Mays, who hasn't been shy about approaching total strangers in search of money for his cash-hungry business.

He advised those who have trouble securing funding from a traditional source, such as people with less-than-perfect credit, to creatively seek out money elsewhere -- whether from family, friends, the community or others who are interested in your business area. The key is to be enthused and get others to believe in your idea. "I'm excited about the economy," he said. "It's time for us to take responsibility and do something."

Even during a downturn, it's possible to find money for your business -- if your plan, connections and reputation are strong enough. "You've got to be able to figure out how to get the doors open," he said.

Investors, he said, are afraid to lose money, but they also don't want to miss out on the next Google. So prove to them: Can you build your product? Will anyone buy it? Do you have the talent to do it? Do you have a business model that makes sense? If yes, then you're in decent shape. But be prepared and build in a margin of error, because starting a business will always take longer and cost more than you first think.

In a difficult economy, he said, "There is always a silver lining for somebody. It may not be you unless you position yourself to take advantage of it."

That requires being competent in your business' core area, paying attention to the world around you -- including the news media and leading indicators in your industry -- and always exceeding customers' expectations. The best opportunity to grow a business, he said, is through existing customers.

Also helpful: Making a product you know there will be a need for. For minority businesspeople, he noted, that could involve entering a field with few or no other minority firms.

The basic principles that make a business sound will allow it to survive and even thrive during a recession, he said. But because signs of a downturn sometimes aren't clear until it's too late, businesses have to remain vigilant and poised to adapt. "When you're starting out," he said, "survival is No. 1. If you're not around tomorrow, adaptation is irrelevant."

Businesses should focus on what they do best, he said, but shouldn't be afraid to branch out into complementary areas, as long as their downsides don't outweigh the potential for profit.

Above all: Strive for personal integrity and provide clients with accurate, truthful information -- don't overpromise.

Convention in Charlotte

The Charlotte steelmaker announced plans Thursday to spend $2 billion to build an iron-making plant, news that came on the heels of two overseas joint ventures announced Tuesday and Wednesday.

The deals are the result of ongoing talks that just happened to wrap up this week, CEO Dan DiMicco said.

"It was more of a coincidence that it happened `boom, boom, boom,' " he said. "We're working on 10 to 20 projects at a given time. Sometimes they hit, and sometimes they don't."

In its latest announcement, Nucor said it has applied for a permit to build an iron-making plant in St. James Parish, La.

If it chooses the Louisiana site, the plant would be the first of its kind in the U.S. in the last 30 years, the company said.

Nucor is also considering a site overseas, DiMicco said.

The plant's initial phase, costing $2 billion and employing 500 workers, would include a port on the Mississippi River and a three million-ton blast furnace.

A possible $1 billion second phase would add another blast furnace and 250 more employees, the company said.

The plant is not a certainty; Nucor's board must approve the site and project before it can move forward, DiMicco said.

The company wants to build the plant to produce its own pig iron, a raw ingredient in steel making, rather than importing it, as costs have risen recently, he said.

Nucor, headquartered near SouthPark, is one of the world's largest steel manufacturers, with 18,000 employees worldwide.

Its net earnings for the first quarter were $409.8 million, up 8 percent from the first quarter of 2007. Nucor shares closed at $81.44 Thursday, up $1.45.

The company's success hinges partly on the industry's -- steel prices have surged to record highs this year, despite a slowing U.S. economy.

While the domestic demand for steel has dropped, demand continues to climb internationally, reaching the highest levels since right after World War II, DiMicco said.

"The global demand for commodities and new infrastructure is huge," he said.

"We believe that in the next 20 to 30 years, we're going to have more up periods than down periods."

Even domestically, steelmakers are thriving because global demand is so high and the U.S. is seeing fewer imports, meaning the supply here is down, too, DiMicco said.

And the weak U.S. dollar means domestic producers have some of the best prices in the world.

Nucor's transactions this week are the latest in a string of big deals, including a $1.44 billion acquisition of the David J. Joseph scrap metal company in March.

Analysts say the moves are a well-timed attempt to capitalize on the thriving overseas market and have come at a good price.

More projects are in the works, DiMicco said, though he's staying mum on details for now.

Nucor's new deals

• Thursday: Nucor announced plans to spend $2 billion on a new iron-making plant, either in Louisiana or overseas. The company has applied for a building permit, but plans for the project have not been finalized.

• Wednesday: The company announced the signing of a memorandum of understanding with Sidenor S.A. to buy a 34 percent share of a new joint venture that will produce and distribute long steel products and plate in the Balkans, Turkey, Cyprus and North Africa.

• Tuesday: Nucor announced plans to acquire part of an Italian steelmaking company, paying $658 million for a 50 percent stake in a joint venture with Duferco S.A. that will produce steel beams in Italy and distribute them in Europe and North Africa.

The Prius, which went on sale in Japan in 1997, has been a big hit with drivers around the world. Its popularity is going strong amid surging gas prices and growing concerns about the environment.

A cumulative 1.028 million Prius vehicles have been sold globally as of the end of April, Toyota Motor Corp. said Thursday.

Toyota said introduction of the Prius has resulted in 4.5 million metric tons less of global warming gases compared with having standard gas engine cars on the road instead of the hybrid.

Of the more than one million Prius sales worldwide, nearly 592,000 were sold in North America and 315,000 in Japan, Toyota said.

The once major Charlotte builder said Thursday that it lost $230 million in the first three months of the year, four times its loss a year ago. The number of houses sold fell 43 percent.

Beazer, based in Atlanta, also lost $138 million in the final three months of 2007, according to a report filed late in the day.

"It was ugly," said Vicki Bryan, an analyst with corporate bond research firm Gimme Credit in New York. "This is a time when people are trying to circle the wagons and hoard cash, trying to reduce debt. Beazer is not having much luck doing either."

Thursday's reports, in addition to multiple filings submitted Monday, bring the home builder current with quarterly financial reports due federal regulators. Beazer had delayed filings since last summer when it fired its chief accounting officer for attempting to destroy documents during an internal investigation.

That company investigation followed an Observer report last year that found Beazer arranged loans some buyers couldn't afford and violated lending rules. The paper's report triggered ongoing investigations by regulators and the FBI.

In February, Beazer halted lending after having acknowledged employees of its mortgage arm violated federal housing regulations. The company said this week that it had fired an undisclosed number of people in its lending unit. On Thursday, Beazer said it paid nearly $600,000 in severance and other expenses related to the closure.

In this week's filings, Beazer said it believes the fired accounting executive caused or allowed problems with the company's books and that it "uncovered collusion with some of the company's business unit employees to inappropriately manipulate earnings." On Monday, the company restated earnings for several years, resulting in a net gain.

Beazer's chief executive, Ian McCarthy, said the company will resume regular filings.

"We ... appreciate the patience and support shown to us by our investors, customers, and business partners while we worked through the restatement," he said in a news release Thursday evening.

Like all homebuilders, Beazer has been hurt by the nation's housing meltdown. The company has halved its work force and exited several markets, including Charlotte. The housing rout followed waves of foreclosures caused by lax lending and exotic mortgages. The Observer found last year that Beazer had high rates of foreclosure in many of its Charlotte-area projects.

Beazer's legal challenges include lawsuits by customers and shareholders as well as investigations by the FBI, the Department of Housing and Urban Development and the U.S. Securities and Exchange Commission.

"I definitely consider them among the more troubled homebuilders," Bryan said. "The problem with Beazer is you have to quantify all these unknowns, and there have been so many."

Among the unknowns is the amount of any potential fines and losses Beazer might have to pay. Last fall, Beazer estimated it could settle with regulators for $8 million to $15 million. New filings say the company is still trying to settle, but that it can not quantify the potential charges.

"It would signal to me that they're afraid to put a number on it because it's probably going to be substantially higher than the original estimates," said Gary Lacefield, a former HUD investigator, now president of Risk Mitigation Group, a Texas consulting firm that advises lenders.

Beazer lawsuits

Carolinas homebuyers have filed at least four lawsuits against Beazer since last year. Two have been dismissed.• In March 2007, Lea and Mark Tingley sued Beazer, alleging the company illegally arranged loans that some borrowers could not afford, producing a high rate of foreclosures and a subsequent decline in property values in the Tingleys' Southern Chase neighborhood in Cabarrus County. A federal judge dismissed the case last month. The Tingleys' lawyers say they will appeal.

• In April 2007, a Columbia woman sued Beazer, with allegations similar to those of the Tingleys. In September, a federal judge dismissed the case.

• Last summer, 10 buyers in northern Charlotte's Oak Hill subdivision sued Beazer alleging the home builder "fraudulently qualified" them for loans they couldn't afford.

• Last month, a woman who lost her Southern Chase home to foreclosure, sued Beazer. The case, seeking class-action status, alleges Beazer inflated home sales prices to include down payment "gifts" and closing costs.

Morehead property for sale

Beazer's departure from the Charlotte market put a choice property up for sale, one of the largest undeveloped parcels inside the Interstate 277 loop. The Morehead Street land had been home to the Coffee Cup, a soul-food diner known for serving people of all races and classes since before desegregation. The owners reopened elsewhere.

Beazer bought the property near Bank of America Stadium for $16.7 million in 2005 and invested heavily in engineering, grading and preparing for building.

Earlier this year, the asking price was about $40 million for the site, which totals roughly 18.5 acres. An Atlanta developer had been interested.

"My guys were not able to make the numbers work," said Kevan Smith, a land broker with NAI Southern Real Estate in Charlotte. "They bowed out gracefully."

The property is now listed with a national commercial real estate company, CB Richard Ellis. Frank Larsen, a broker in the firm's Charlotte office, said he could not discuss details of the listing except to say the site could be divided into smaller parcels.

"I believe this downturn will accelerate consolidation in the banking industry across geographies and in the financial services industry across product and market segments," Lewis said in prepared remarks for the commencement ceremony at New York University's Stern School of Business.

Consolidation across geographic regions will lead to "stronger, more diverse and more efficient institutions," he said. "Monoline" companies that specialize in just one product also are takeover candidates because they can't fall back on other businesses if their speciality hits hard times, he added.

Bank of America is in the midst of a takeover of Countrywide Financial Corp., the struggling mortgage lender. The bank has said the deal is "on track," but analysts have wondered if the deal will fall apart or be renegotiated as Countrywide's finances deteriorate.

A spokesman declined to comment on whether Lewis' speech indicated more dealmaking was in the works for the Charlotte bank. Bank of America, the nation's No. 1 bank by market value, was formed by scores of big deals over the past three decades. Additional bank buyouts would be difficult, though, because it's up against a 10 percent cap on total deposits.

Wachovia Corp., Charlotte's other big bank, is in the midst of digesting a merger, last year's purchase of brokerage A.G. Edwards Inc. The bank, which is also suffering loan losses from its 2006 Golden West Financial Corp. acquisition, has signaled in recent months that it's focused on its existing businesses, not more deals.

With much of the financial industry stumbling, few buyers for banks have emerged lately. Cleveland-based National City Corp., for example, reportedly shopped itself without finding a taker.

In his speech, Lewis also questioned whether lightly regulated investment banks should be bailed out by the government. The Federal Reserve in March aided JPMorgan Chase & Co.'s planned purchase of investment bank Bear Stearns Cos.

"Providing a public backstop to an inherently risky business that is not required to backstop itself is a tough sell for taxpayers, and carries no small amount of moral hazard," he said.

As for recent efforts to revamp bank regulation, Lewis, CEO since 2001, said he favored simplification: "fewer agencies, less duplication of effort, less political wrangling over turf." He added the bank would support reforms that meet that aim.

Trouble gauging risk

Lewis' speech came the same day his chief financial officer, Joe Price, touched on recent market troubles in remarks at a conference at the Chicago Federal Reserve Bank.

In his speech, Price said he backs current "fair-value" accounting rules, even though these guidelines have required banks to take big writedowns due to the falling value of mortgage-related investments. "It is probably bringing to light some areas where the risk was underestimated, either in size or severity," he said.

In businesses where banks originate loans and securities to be distributed to investors, they have been required each quarter to record the value of the investments they still hold. When these values fall, this decline translates into lower profits. Some critics have said these accounting actions are unnecessarily exacerbating the credit crunch.

Price also advocated more disclosure of financial information by banks to allow investors to better gauge the risks they face, although he didn't provide specifics.

Bank of America, the country's No. 2 bank by assets, receives more ACH payments than any other bank, according to an electronic payments trade group called NACHA. Wells Fargo, which is No. 5 by assets, is second for receiving such payments.

Financial terms of the deal were not disclosed.

A Bank of America spokeswoman, Shirley Norton, said the move will not result in any layoffs. -- Christina Rexrode

Charter approved for new bank

The N.C. Commissioner of Banks on Thursday approved the charter of a proposed Charlotte-based community bank, one of the last steps needed before opening.

Legacy Bank, founded by former Wachovia Corp. executive Al Bush, said it has raised about 70 percent of the $26.6 million in capital it has been required to gather from investors. The bank, which will have its headquarters and first branch in SouthPark, said it plans to open this summer. -- rick rothacker

Suit against Countrywide to proceed

A federal judge has ruled that a shareholder lawsuit against Countrywide Financial Corp. executives and directors should go to trial, rejecting several arguments by the troubled mortgage lender to dismiss the case.In a ruling issued Tuesday, U.S. District Judge Mariana Pfaelzer in Los Angeles sided with several public pension funds, finding that their witnesses' accounts of Countrywide's business practices were compelling. -- associated press

Ad for BofA touts `back to basics'

New TV commercials for Bank of America will debut this week, encouraging consumers to employ "back to basics" financial strategies, the bank said Thursday.

The commercials, part of a campaign launched last year called "Bank of Opportunity," will promote certain CDs and money market accounts, as well as the bank's Keep the Change program, which has helped customers save $1 billion since its inception. -- Christina Rexrode

TIAA-CREF celebrates 90th

TIAA-CREF, the New York-based pension giant with a major Charlotte presence, will mark its 90th birthday on Saturday. TIAA-CREF is the country's largest private retirement system, specializing in academic, research, medical and cultural fields. The organization serves 3.4 million individuals and more than 15,000 institutions, with $420 billion in combined assets under management. -- christina rexrode

New SouthPark branch planned

Bank of America Corp. plans a new SouthPark branch at 4415 Sharon Road, a former Bank of Granite Corp. location. It's set to open in mid-August. -- rick rothacker

Appalachian State University is moving closer to formally joining the North Carolina Research Campus in Kannapolis. It hopes to meet in the next week or so with representatives of the UNC system and later with campus creator David Murdock, said Lorin Baumhover, chief of staff in the ASU chancellor's office.The university would focus on exercise science, immunology and nutrition, he said, and hopes to get funding to hire three faculty members as well as research assistants and other staff.

Catawba College in Salisbury also has held talks with the campus, a biotech hub being developed by Murdock, the billionaire owner of Dole Food. Catawba is interested in placing students and graduates in internships and research opportunities.

It also would like to see its theater arts faculty and students be involved in a performing arts center planned for the campus, and have others work at a child-care facility there. The college also is looking to develop a four-year degree in biotechnology.

It eventually may offer night classes around Kannapolis because of the expected growth of the city.

And Davidson College President Thomas Ross said his school is interested in having a role at the campus, but has not figured out what it will be yet. -- Adam Bell

Titan expands global capability

CONSULTING

Charlotte-based Titan Technology Partners announced Thursday it had bought Sinmax Global, a business intelligence consulting company with operations in Singapore and Chennai, India.

Titan provides information technology consulting, strategy, training and outsourcing. Sinmax serves customers in North America, Asia and the Middle East from its Asian base and will expand Titan's capabilities to support global clients, CEO Michael Vadini said in a news release. Sinmax Global will be renamed Titan Sinmax.

Privately held Titan declined to disclose the purchase price.

The Sinmax purchase marks Titan's second Asian acquisition this year. In February, Titan bought Singapore firm ESP Consulting. -- jen aronoff

The trio of crises -- housing, credit and financial -- have exposed weaknesses in financial firms' ability to sufficiently detect and hedge against risks.

Banks and other financial players have racked up multibillion-dollar losses when investments in complex mortgage-backed securities soured with the collapse of the housing market. Credit problems in housing quickly spread to other areas, intensifying the turmoil.

"Improvements in banks' risk management will provide a more stable financial system by making firms more resilient to shocks," Bernanke said in a speech to a Federal Reserve banking conference in Chicago.

Banks need to improve efforts to identify and measure risk, value assets and liabilities, and prepare for disruptions when access to cash or the ability to smoothly buy and sell can be impaired, the Fed chief said.

Regulators also need to bolster their oversight, Bernanke said.

"It is clear that supervisors must redouble their efforts to help organizations improve their risk-management practices," Bernanke said. "We have focused on the institutions in most need of improvement, but we will continue to remind the stronger institutions of the need to remain vigilant, particularly in light of the ongoing fragility of market conditions," he added.

Bernanke also called on banks and other financial institutions to step up efforts to raise capital.

In his speech and in fielding questions afterward, Bernanke did not give clues about the Fed's next move on interest rates or discuss the state of the U.S. economy.

CBS Corp. is acquiring a big online reach with its acquisition of CNet Networks Inc. but also a company that's faced heavy criticism from investors. Those concerns as well as the hefty $1.8 billion price tag helped send CBS's shares down after the deal was announced Thursday.

CNet was an early player in the dot-com boom and survived the subsequent crash with a steady focus on technology news, reviews and entertainment. But its stock, which once traded as high as $79 during the bubble, has slumped over the last two years, leading to an investor rebellion that was gathering steam just as the CBS deal was announced.

The $11.50-per-share price CBS is paying represents a huge premium of 45 percent over CNet's stock price the day before and seemed likely to resolve a looming proxy battle with its biggest investor, the hedge fund Jana Partners LLC, which has pressed for action to raise CNet's stock price. Jana declined to comment.

Speaking on a conference call, CBS's chief executive, Leslie Moonves, said CNet's 54 million unique users per month would leapfrog CBS into the top 10 online audience companies in the U.S., giving CBS new ways to distribute its programming.

CNet investors cheered the deal, sending the company's shares up $3.46, or 43.5 percent, to $11.41. CBS shareholders were less optimistic, and pushed that company's shares down 59 cents, or 2.4 percent, to $24.23. Citigroup analyst Jason Bazinet said in a note that the "pricing risk is high" for CBS.

From meat to mustard, consumers are trying to control their food bills by buying smaller-size items as they grapple with soaring prices. Companies have taken note, experimenting with different measures like 3/4 gallon milk jugs and pies that have shrunk to 6 inches.

"I don't stockpile anymore," said Lorraine Woodcheke, a publicist from San Francisco, who in January started buying smaller containers of soy milk, olive oil and fresh-cut fruit to control her budget. "I don't have a pantry that is overflowing. I can't justify letting food go bad the way I used to."

Data from research company The Nielsen Co. and retailers including BJs Wholesale Club Inc. that sell fuel show that downsizing is even occurring at the pump, with drivers limiting how much they fill their tank to avoid getting hit with a hefty payment at one time.

While plenty of shoppers are still buying in bulk, helping boost sales at warehouse club operators like Costco Wholesale Corp., the growing trend of buying in bits is the latest sign of how cash-strapped people are.

Part of it may be psychological: Consumers can't adjust to having to pay $60 at once to fill their gas tank, or spend $150 on the weekly food bill. Many are also more conscious of being wasteful: throwing out milk when it was $3 per gallon may not be a big deal, but it's another matter when it's $4.

Some consumer advocates warn that the smaller packages are a way for food makers to pass on the increase in ingredient costs. And even if buying smaller means buying more often -- and not saving money in the long run -- many shoppers feel they don't have a choice.

Food prices rose 4.4 percent over the past 12 months, with prices for basic items shooting up even more: bread is up 14.7 percent and milk is up 13.3 percent over the past year, according to the latest Consumer Price Index. Gas could reach more than $4 per gallon on average this summer.

When the option is available, customers are now favoring smaller sizes in such items that have had significant price increases such as cooking oil, said Karen Meleta, a spokeswoman at Wakefern Food Corp. The retailer-owned cooperative operates 200 stores under ShopRite and PriceRite in seven Northeastern states. But she did say that consumers continue to stock up in bulk on other items.

The last time consumers were buying a little at a time to conserve cash was in the 1970s, when food and oil prices surged to record highs, said Burt Flickinger, managing director of Strategic Resource Group, a retail consulting firm.

Wal-Mart is making sure it has more smaller sizes of items like pasta and mustard as well as single rolls of toilet paper in the days before people receive government checks and public assistance at the beginning of the month, said spokesman John Simley. But after payday, the discounter stocks up on bulk items as consumers have enough money to spring for bigger sizes that can last longer.