With unemployment at a low level, you're probably noticing how hard it is to find skilled and qualified workers. For a small business, hiring a new employee is a huge step. Not only does the person need to fit the job description, she also has to fit into your office. But how do you determine whether a candidate is a good choice? Everyone is on his best behavior during interview.
Small Business Trends blogger Anita Campbell recommends the best questions to ask to dig deeper into the person in your interview chair. If you're bored with the typical "tell me about yourself..." responses, try some of her tips.
Saturday, October 31, 2009
A Capital Idea
Most small-business owners spend about $10,000 to start their own companies, according to results from a Wells Fargo/Gallup survey announced this week. The poll of 600 business owners found that 73% funded their business with personal savings, while the rest got loans and lines of credit.
Sometimes going into debt to start a business can make sense. For tips on how to know when it's smart to borrow start-up money, check out this recent MyBusiness story.
Sometimes going into debt to start a business can make sense. For tips on how to know when it's smart to borrow start-up money, check out this recent MyBusiness story.
When Temporary Became Permanent
Last week, we pointed to a story about business owners who were struggling to survive in New Orleans a year after Hurricane Katrina's devestating blow. Today, a story in the Salt Lake Tribune highlights a different kind of survival: In the weeks following the disaster, these owners packed up their businesses and got out of New Orleans. Though some had plans to return, all of them ended up finding permanent homes for their businesses in new cities.
The panic of the early days is still fresh on their minds. "You think, this can't be happening, when you slip and fall in the grime and you're covered with who knows what, and there's no running water to wash it off with," says Christine MCAtte, owner of Adventures in Adveritising/Insignia Marketing, which is now based in The Woodlands, Texas. Greg Mangiaracina moved his business, A-Pro Home Inspection Services, to San Antonio, Texas, and hasn't looked back. "I can't put my family through this again," he says.
Relocating wasn't easy, but facing the choice of a city without basic services and sky-high real estate costs, these business owners say they made the only choice they had.
The panic of the early days is still fresh on their minds. "You think, this can't be happening, when you slip and fall in the grime and you're covered with who knows what, and there's no running water to wash it off with," says Christine MCAtte, owner of Adventures in Adveritising/Insignia Marketing, which is now based in The Woodlands, Texas. Greg Mangiaracina moved his business, A-Pro Home Inspection Services, to San Antonio, Texas, and hasn't looked back. "I can't put my family through this again," he says.
Relocating wasn't easy, but facing the choice of a city without basic services and sky-high real estate costs, these business owners say they made the only choice they had.
State of the Small-Business Economy
A new survey about the small-business take on the U.S. economy reveals similar findings to what we've been hearing recently: Things are OK, not bad, not great. According to a survey by Discover Business Card, small-business owners are more optimistic about the overall economy than the general population: 39 percent of business owners rate the economy as "excellent" or "good," compared to 34 percent for the general population. But in looking into their crystal balls, almost 60 percent of small-business owners surveyed feel economic conditions are getting worse.
This recent news is in-line with results from the monthly NFIB Small-Business Economic Trends. While small-business optimism took a dip in May and June, it crept back up again in July signaling that business owners aren't quite sure what to make of the current market. Luckily the Fed is responding by raising interest rates in hopes of slowing demand enough to keep firms from raising prices, thus staving any worries of rising inflation.
In the meantime, small-business owners will keep plugging away--and serving as the most reliable indicators to where the economy is headed.
This recent news is in-line with results from the monthly NFIB Small-Business Economic Trends. While small-business optimism took a dip in May and June, it crept back up again in July signaling that business owners aren't quite sure what to make of the current market. Luckily the Fed is responding by raising interest rates in hopes of slowing demand enough to keep firms from raising prices, thus staving any worries of rising inflation.
In the meantime, small-business owners will keep plugging away--and serving as the most reliable indicators to where the economy is headed.
Do's and Don'ts of Selling to Women
If you have customers, don't miss the guest columnist's post on the Small Business Trends blog. Author Mary Hunt offers 5 Do's and 5 Don'ts when selling to women small-business owners. Most of the advice is common sense but it's always good to be reminded of basic selling tips.
Hunt urges sellers to protect their "cyber karma" since women use word-of-mouth referrals far more than men. "Email and blogs have upped that communication ante. Make sure they leave your office, phone call or website happy--or at least not ticked," she writes.
She also offers a good piece of advice when selling to any customer (male or female): Don't overlook the power of "thank you."
Hunt urges sellers to protect their "cyber karma" since women use word-of-mouth referrals far more than men. "Email and blogs have upped that communication ante. Make sure they leave your office, phone call or website happy--or at least not ticked," she writes.
She also offers a good piece of advice when selling to any customer (male or female): Don't overlook the power of "thank you."
The Business of Security
Five years and one day ago, Chuck Call, CEO of Albuquerque-based ICx MesoSystems, could have never guessed how his business would change. In the five years since the terrorist attacks of Sept. 11, the company has sold about 600 of its air-sampling devices, which are capable of sniffing out bioterrosim agents, to federal, state and local agencies, driving up ICx’s sales this year to $7 million.
According to a story in USA Today, the events of 9/11 caused the homeland security business to boom. The industry now accounts for more annual revenue than the movei-making or music industries.
Though corporations have been the big winners of government contracts, small businesses have gained their share of new business as well. In the last fiscal year (which ended in June) small businesses accountd for 33 percent of all contract dollars spent by the U.S. Department of Homeland Security. That exceeds the U.S. Small Business Administration's goal of having 25 percent of all contracts go to small companies.
According to a story in USA Today, the events of 9/11 caused the homeland security business to boom. The industry now accounts for more annual revenue than the movei-making or music industries.
Though corporations have been the big winners of government contracts, small businesses have gained their share of new business as well. In the last fiscal year (which ended in June) small businesses accountd for 33 percent of all contract dollars spent by the U.S. Department of Homeland Security. That exceeds the U.S. Small Business Administration's goal of having 25 percent of all contracts go to small companies.
Small-Business Optimism Faltering
As the weather cools off, so does the optimism of America's small-business owners. In August, NFIB's Small-Business Optimism Index fell more than two points to 95.9, the lowest reading recorded since March 2003.
Borrowing difficulites seem to be the main trigger of the downward turn. Regular borrowing activity was reported by 46 percent of owners, up eight points from July, and the highest level recorded in the survey's 20-year history.
"Credit has become more expensive. It's significant that more owners want it and a higher percentage of owners are having a tougher time getting it," said Bill Dunkelberg, NFIB's chief economist. "Owners expect the coming months to bring increased borrowing difficulties."
Two positive signs in the monthly survey: the percent of firms with unfilled job openings and the percent of owners planning to create new jobs.
Borrowing difficulites seem to be the main trigger of the downward turn. Regular borrowing activity was reported by 46 percent of owners, up eight points from July, and the highest level recorded in the survey's 20-year history.
"Credit has become more expensive. It's significant that more owners want it and a higher percentage of owners are having a tougher time getting it," said Bill Dunkelberg, NFIB's chief economist. "Owners expect the coming months to bring increased borrowing difficulties."
Two positive signs in the monthly survey: the percent of firms with unfilled job openings and the percent of owners planning to create new jobs.
We're from the government, and we're here to help
Finally, something from the federal government that is useful for small-business owners. Business.gov, dubbed as "the official business link to the U.S. government," relaunches today, providing one-stop shopping for business owners looking for information on how to comply with government regulations.
Managed by the Small Business Administration, Business.gov compiles information from 21 federal agencies in an effort to improve the way the federal government serves citizens and businesses.
First launched in 2004, Business.gov originally focused on resources for starting, growing and managing a business. But focus groups revealed that what business owners really wanted was help dealing with the all the paperwork and rules about running a business. The easy-to-navigate site is divided into topics and industries.
Managed by the Small Business Administration, Business.gov compiles information from 21 federal agencies in an effort to improve the way the federal government serves citizens and businesses.
First launched in 2004, Business.gov originally focused on resources for starting, growing and managing a business. But focus groups revealed that what business owners really wanted was help dealing with the all the paperwork and rules about running a business. The easy-to-navigate site is divided into topics and industries.
Friday, October 30, 2009
Small Business Optimism Bounces Back
Small business hopes rebounded in September as the NFIB Small-Business Optimism Index rose 3.5 points to a more normal level of 99.4. "This confirms the slowdown in the economy anticipated in the July survey – down, but not out," said NFIB Chief Economist and MyBusiness magazine columnist William Dunkelberg. The Index, bouncing back to near its 30-year average, was lifted by positive movement among six components including the outlook for an improved economy, favorable earnings and higher sales. Inflation pressure also eased.
What Tops Your List?
Are you more worried about the cost of a tank of gas or a visit to the doctor's office? According to a new study by PNC Financial Services, energy has overtaken health-insurance costs as the No. 1 problem small- and mid-sized business owners want to see addressed in the miderm elections.
USA Today's blog points out that the survey was conducted before energy prices fell (before they started to rise again). But as cold weather sets in (and as prices likely continue to rise) energy-cost concerns won't be going away any time soon.
NFIB monitors what small-business owners are thinking in its Problems and Priorities surveys. In the most recent edition, health-care costs still topped the list (while energy came in at No. 4). But the top spots on this survey are a lot like the college football top 25--any number of teams deserve the No. 1 spot (except, unfortunately, my Auburn Tigers).
USA Today's blog points out that the survey was conducted before energy prices fell (before they started to rise again). But as cold weather sets in (and as prices likely continue to rise) energy-cost concerns won't be going away any time soon.
NFIB monitors what small-business owners are thinking in its Problems and Priorities surveys. In the most recent edition, health-care costs still topped the list (while energy came in at No. 4). But the top spots on this survey are a lot like the college football top 25--any number of teams deserve the No. 1 spot (except, unfortunately, my Auburn Tigers).
A Heavy Load
Belt-tightening at the pump takes on a whole new meaning thanks to a study released by the University of Illinois. Researchers found that Americans are using nearly 1 billion more gallons of gasoline each year than they did in 1960 because of expanding waistlines, according to this AP article. More weight makes for lower gas mileage, so your arteries aren't the only thing you'll save if you pass on that super-sized burger combo.
"The bottom line is that our hunger for food and our hunger for oil are not independent," says study co-author Sheldon Jacobson. "There is a relationship between the two."
Recent trends in consumer-driven health plans have some small businesses looking at the value of promoting wellness habits among employees. As gas prices continue to rise, healthy eating habits might not only affect your insurance premiums--they could affect your fleet's fuel bills as well.
"The bottom line is that our hunger for food and our hunger for oil are not independent," says study co-author Sheldon Jacobson. "There is a relationship between the two."
Recent trends in consumer-driven health plans have some small businesses looking at the value of promoting wellness habits among employees. As gas prices continue to rise, healthy eating habits might not only affect your insurance premiums--they could affect your fleet's fuel bills as well.
Small-Business Optimism Spikes in October
With elections just a few days away, one issue that doesn't seem to be bothering small-business owners is the economy. A Discover Small Business Watch survey released today found that during the past month business owners reported big jumps in cash flow and a greater willingness to invest in business development. Forty-four percent rated the economy as "excellent" or "good." Sixty-one percent reported they had no cash-flow issues.
This survey is a little more upbeat than the most recent numbers available from NFIB's Small-Business Optimism Index. In September, NFIB reported that while the labor market was very strong, small-business owners were less confident about the overall economy. The Optimism Index rose from the August reading, but NFIB Chief Economist Bill Dunkelberg remained cautious.
Now with the stock market experiencing robust growth in recent weeks and the Fed keeping inflation in check, business owners seem to be responding with greater certainty about their economic futures.
This survey is a little more upbeat than the most recent numbers available from NFIB's Small-Business Optimism Index. In September, NFIB reported that while the labor market was very strong, small-business owners were less confident about the overall economy. The Optimism Index rose from the August reading, but NFIB Chief Economist Bill Dunkelberg remained cautious.
Now with the stock market experiencing robust growth in recent weeks and the Fed keeping inflation in check, business owners seem to be responding with greater certainty about their economic futures.
Which States Are Best for Business?
The Tax Foundation, a nonpartisan, nonprofit research organization that monitors tax policy, recently named the best--and worst--states for business in its 2007 State Business Tax Climate Index. Wyoming topped the "business-friendly" list, while Rhode Island came in as the worst in the rankings. The foundation measured the competitiveness of each state’s tax system in five different sectors: corporate tax, individual income tax, sales tax, unemployment tax and property tax.
According to the foundation, the 10 best states for business are: Wyoming, South Dakota, Alaska, Nevada, Florida, Texas, New Hampshire, Montana, Delaware and Oregon. The 10 worst states are: Minnesota, Maine, Iowa, Nebraska, California, Vermont, New York, New Jersey, Ohio and Rhode Island. Read the full report here.
With Election Day less than a week away, NFIB is fighting for candidates who can deliver tax relief for small business. Read more about the tax issues that matter most to small-business owners here.
According to the foundation, the 10 best states for business are: Wyoming, South Dakota, Alaska, Nevada, Florida, Texas, New Hampshire, Montana, Delaware and Oregon. The 10 worst states are: Minnesota, Maine, Iowa, Nebraska, California, Vermont, New York, New Jersey, Ohio and Rhode Island. Read the full report here.
With Election Day less than a week away, NFIB is fighting for candidates who can deliver tax relief for small business. Read more about the tax issues that matter most to small-business owners here.
Online Holiday Shoppers Seek Small-Business Sites
I'm already tired of Christmas music, and that makes me sad. For the past few weeks, I've heard Bing Crosby crooning in most of my local retail shops. Can't we eat the leftover turkey before we pull out the Christmas lights? Guess not.
The music, the decorations and the crowds mean one thing: Holiday shoppers are coming. Each year, retailers set their sights (and sites) on topping their previous year's sales records, and the 2006 holiday shopping season is no exception.
The good news for small business is that online shoppers aren't only drawn to national retailers. In fact, 75 percent of holiday shoppers said they are likely to purchase gifts online this year from small businesses, according to a Yahoo Small Business survey conducted by Harris Interactive (press release link). Topping shoppers' wish lists: secure payment systems, easy customer checkout and free shipping.
If you want to find tips on increasing your ecommerce, visit this section of the NFIB.com's Business Toolbox. Better get started soon before Valentine candy boxes fill stores.
The music, the decorations and the crowds mean one thing: Holiday shoppers are coming. Each year, retailers set their sights (and sites) on topping their previous year's sales records, and the 2006 holiday shopping season is no exception.
The good news for small business is that online shoppers aren't only drawn to national retailers. In fact, 75 percent of holiday shoppers said they are likely to purchase gifts online this year from small businesses, according to a Yahoo Small Business survey conducted by Harris Interactive (press release link). Topping shoppers' wish lists: secure payment systems, easy customer checkout and free shipping.
If you want to find tips on increasing your ecommerce, visit this section of the NFIB.com's Business Toolbox. Better get started soon before Valentine candy boxes fill stores.
Small-Business Optimism Continues to Grow
Small-business owners are full of holiday cheer as we enter the last month of 2006. Two recently released surveys show small-business owners' confidence in the U.S. economy continues to rise.
The Discover Small Business Watch survey saw an increase for the fourth straight month, with almost half of respondents rating the U.S. economy as "excellent" or "good." November's spike came from a substantial spike in the number of owners who think economic conditions for their businesses will improve during the next six months.
The latest Small-Business Economic Trends report from NFIB's Research Foundation also measured an uptick in confidence last month, rising 1.3 points to 100.7 (which is close the 30-year average of 100.2). "The domestic economy is hardly on the ropes, even with a weak housing market," the Foundation says.
The Discover Small Business Watch survey saw an increase for the fourth straight month, with almost half of respondents rating the U.S. economy as "excellent" or "good." November's spike came from a substantial spike in the number of owners who think economic conditions for their businesses will improve during the next six months.
The latest Small-Business Economic Trends report from NFIB's Research Foundation also measured an uptick in confidence last month, rising 1.3 points to 100.7 (which is close the 30-year average of 100.2). "The domestic economy is hardly on the ropes, even with a weak housing market," the Foundation says.
Five Ways to Predict Business Success
None of us can see into the future (and that's not a bad thing when you think about it). But if you're working hard, yet feel like you're not getting anywhere with your business, good news. Forget about predicting the future. New research from Six Disciplines Corporation finds that success might can be boiled down to just five attributes.
Small Business Trends Blog editor Anita Campbell recently revealed the traits most often shared by successful businesses with 10 to 100 employees. The first four are no surprise: a strong leadership team, the ability to attract and retain quality employees, a disciplined approach to business and strategic use of technology. But like Campbell, you might be surprised by the fifth: the wise use of trusted outside providers.
If you're trying to do it all yourself, relax--and seek help. The smartest businesspeople know that no one knows everything. Find advisors you trust and tap into their knowledge. Your future will look brighter.
Small Business Trends Blog editor Anita Campbell recently revealed the traits most often shared by successful businesses with 10 to 100 employees. The first four are no surprise: a strong leadership team, the ability to attract and retain quality employees, a disciplined approach to business and strategic use of technology. But like Campbell, you might be surprised by the fifth: the wise use of trusted outside providers.
If you're trying to do it all yourself, relax--and seek help. The smartest businesspeople know that no one knows everything. Find advisors you trust and tap into their knowledge. Your future will look brighter.
Give a Gift to Your Community: Shop Locally
I keep thinking I'm done with my holiday shopping--and then I remember a few more things on my list. My goal is to knock it all out this weekend so that I can relax and actually enjoy the last week before Christmas. When I head out on Saturday morning, I'm going to make sure to shop first at locally owned stores. Not only will I avoid the parking-lot madness and massive crowds that overtake the mall and big-box stores, I'll also be supporting a small-business owner who contributes to my community. Need more convincing? Check out NFIB's five reasons you should shop local businesses this holiday season
A Great Year for Small Business, And Many More to Come
Small-business owners around the world may have different views of the current business climate and different challenges to face in the new year, but there is one thing that they all share: optimism.
MasterCard's annual Global Small Business Survey revealed that small-business owners feel hopeful about the upcoming year and confident they will meet financial goals in 2007. While 27 percent named competition as the biggest challenge ahead, more than half believe that globilizing their business will help them overcome this and acheive even more success. One interesting finding: the number of hours that business owners spend on administration is often proportional to the number of employees they manage, with most spending about 18 hours (in a 50-hour week). The survey, which polled 4,000 small-business owners worldwide, also details how regional differences affect small business around the world.
As for us here at MyBusinessmag.com, it's been a great year. Thanks for sticking with us through the changes to our Web site and, as always, thank you for your continued readership. Check back with us on January 2 for more of the latest news, tips and resources to help you run your small business. Until then, have a Merry Christmas and a Happy New Year!
MasterCard's annual Global Small Business Survey revealed that small-business owners feel hopeful about the upcoming year and confident they will meet financial goals in 2007. While 27 percent named competition as the biggest challenge ahead, more than half believe that globilizing their business will help them overcome this and acheive even more success. One interesting finding: the number of hours that business owners spend on administration is often proportional to the number of employees they manage, with most spending about 18 hours (in a 50-hour week). The survey, which polled 4,000 small-business owners worldwide, also details how regional differences affect small business around the world.
As for us here at MyBusinessmag.com, it's been a great year. Thanks for sticking with us through the changes to our Web site and, as always, thank you for your continued readership. Check back with us on January 2 for more of the latest news, tips and resources to help you run your small business. Until then, have a Merry Christmas and a Happy New Year!
Two-Thirds of Employees Consider New Jobs in 2007
No matter how great of a boss you think you are, chances are, lots of your employees would take a better offer if it came along. Two-thirds of all employed U.S. working adults are open to changing jobs in 2007, according to a new Yahoo/Hot Jobs survey. Low unemployment rates and rising wages were the main reasons why 70 percent of those surveyed think 2007 is an ideal time to find a new opportunity.
For small businesses, replacing employees is extremely time consuming. Every position counts--small employers don't have a lot of fluff in their staffs. If replacing a few employees sounds like the last thing you want to do this year, find ways to keep them satisfied before they actually pursue new jobs. We've all read the surveys on how salary isn't necessarily the No. 1 reason people are happy with their jobs, but check out this article from the latest issue of MyBusiness to make sure that money isn't the reason your employees start checking out the want ads.
For small businesses, replacing employees is extremely time consuming. Every position counts--small employers don't have a lot of fluff in their staffs. If replacing a few employees sounds like the last thing you want to do this year, find ways to keep them satisfied before they actually pursue new jobs. We've all read the surveys on how salary isn't necessarily the No. 1 reason people are happy with their jobs, but check out this article from the latest issue of MyBusiness to make sure that money isn't the reason your employees start checking out the want ads.
The Business of Beating Terrorists
The U.S. military thinks your business may hold some secrets about how to win the war on terror. A recent USA Today article suggests that it's not off base to think the solutions for winning the war on terrorism may be found within our country's capitalist society--ironically, the very values terrorists purport to hate.
Why is the military looking to businesses, especially small businesses? Because, as the article explains, "the world of geopolitics has discovered itself to be on the same road that business has been on for some time. That road is flatter, more networked and more decentralized than ever."
By looking at how small companies like YouTube, Skype and Wikipedia are giving old giants in their industries a run for their money, the military hopes to gain some ideas it can use to fight al-Qaeda and other terrorist organizations.
Why is the military looking to businesses, especially small businesses? Because, as the article explains, "the world of geopolitics has discovered itself to be on the same road that business has been on for some time. That road is flatter, more networked and more decentralized than ever."
By looking at how small companies like YouTube, Skype and Wikipedia are giving old giants in their industries a run for their money, the military hopes to gain some ideas it can use to fight al-Qaeda and other terrorist organizations.
Small-Business Optimism Fades
Small-business owners ended 2006 on a serious note, according to the latest NFIB Research Foundation Small-Business Economic Trends Report. Declines in job-creation plans as well as a drop in the number of business owners who expected the economy to improve sent the Small-Business Optimism level down 3.2 points to 96.5 (1986=100).
October readings showed near record-high rates of business owners planning to create new jobs. But by December, that number dropped sharply to just 10 percent. Ten percent of the owners reported that the availability of qualified labor was their top business problem, down two points from November and five points from October, indicating that labor market conditions may be easing.
Read more about what the survey predicts about the first quarter of this year here.
October readings showed near record-high rates of business owners planning to create new jobs. But by December, that number dropped sharply to just 10 percent. Ten percent of the owners reported that the availability of qualified labor was their top business problem, down two points from November and five points from October, indicating that labor market conditions may be easing.
Read more about what the survey predicts about the first quarter of this year here.
Bush Unveils Ideas to Lower Health-Care Costs
Last night was one of those rare occasions in my house where we ate dinner in front of the television. I usually make my husband turn off whatever ball game is on so that we can have a civilized discussion about our days. But we broke the rule last night so that we could watch the president's State of the Union address (we live on the West Coast, so it was on during our dinner time).
In addition to hearing what Bush had to say, it was also fun to watch the sideshows: Obama was seated directly in front of Clinton. Did you notice how that basketball player towered over Laura Bush?! And how cool that the president pointed to a successful small-business owner--the founder of Baby Einstein. Even more impressive: NFIB member Joe Balsarotti and his employee Dan Jones were among the guests included in the first lady's viewing box.
Bush outlined a lot of important initiatives, but none hit as close to home for small businesses as his health-insurance plans. Independent-business owners don't have to be told there's a crisis in this country. Maybe this Congress will finally solve it instead of fighting about it. In case you missed it, here's his speech in its entirety. And check out NFIB's response to the president's health-care plans.
In addition to hearing what Bush had to say, it was also fun to watch the sideshows: Obama was seated directly in front of Clinton. Did you notice how that basketball player towered over Laura Bush?! And how cool that the president pointed to a successful small-business owner--the founder of Baby Einstein. Even more impressive: NFIB member Joe Balsarotti and his employee Dan Jones were among the guests included in the first lady's viewing box.
Bush outlined a lot of important initiatives, but none hit as close to home for small businesses as his health-insurance plans. Independent-business owners don't have to be told there's a crisis in this country. Maybe this Congress will finally solve it instead of fighting about it. In case you missed it, here's his speech in its entirety. And check out NFIB's response to the president's health-care plans.
Forever Young--And Successful
"What did you do this weekend?" "Oh, raised $4.1 million in venture funding for my new Web site." I don't know about you, but I didn't have too many conversations like this in high school. Yet last week, investors announced they were sinking cash--and lots of it--into myYearbook.com, a site created by 17-year-old Catherine Cook that lets teens create their own digital yearbooks.
Teenagers today are proving that age isn't a barrier to the business world if you have a good idea and know how to execute it. The NFIB Young Entrepreneur Foundation hears stories of amazing young businesspeople all the time. Joe Pascaretta, a former winner of the Foundation's annual scholarship award, didn't waste his first semester of college skipping class and eating pizza. Instead, the University of Michigan freshman's landscaping firm grew more than 239 percent to gross more than $1 million in 2006. Kind of puts to shame that "B" in biology that I was so proud to earn my freshman semester.
Teenagers today are proving that age isn't a barrier to the business world if you have a good idea and know how to execute it. The NFIB Young Entrepreneur Foundation hears stories of amazing young businesspeople all the time. Joe Pascaretta, a former winner of the Foundation's annual scholarship award, didn't waste his first semester of college skipping class and eating pizza. Instead, the University of Michigan freshman's landscaping firm grew more than 239 percent to gross more than $1 million in 2006. Kind of puts to shame that "B" in biology that I was so proud to earn my freshman semester.
Somebody's Eyes Are Watching
Small-business owners beware: The IRS is watching you. An article in American Business Daily explains that members of the Senate Finance Committee recently asked the IRS to come up with a plan for closing the estimated $290 million tax gap (the difference between what federal taxpayers owe and what they actually pay). Upon hearing its assignment, the agency pointed to business owners as the biggest source of the problem, claiming that underreported business income makes up one-third of the tax gap.
This issue has NFIB written all over it--the small-business advocacy group refuses to stand by and let the government balance its books on the backs of independent-business owners. A story in the current issue of MyBusiness magazine explains why the IRS is barking up the wrong tree.
This issue has NFIB written all over it--the small-business advocacy group refuses to stand by and let the government balance its books on the backs of independent-business owners. A story in the current issue of MyBusiness magazine explains why the IRS is barking up the wrong tree.
How Current Employees Can Help You Fill Job Openings
Eighty-two percent of business owners surveyed in the most recent NFIB Small-Business Economic Conditions poll said there were few or no qualified applicants to fill open positions within their businesses. Such a tight labor market forces owners to come up with creative recruitment methods.
Some start with proven success stories: star employees. Why not ask them if they have friends or family looking for a job? While this Arizona Republic article points out a few situations to avoid (don't hire someone's aunt just because she "needs a job"), asking reliable employees for applicant referrals might help you fill that open position faster.
Some start with proven success stories: star employees. Why not ask them if they have friends or family looking for a job? While this Arizona Republic article points out a few situations to avoid (don't hire someone's aunt just because she "needs a job"), asking reliable employees for applicant referrals might help you fill that open position faster.
The Six Best Places to Find Funding for Your Business
While running errands downtown this weekend, I found a five-dollar bill on the sidewalk. I hesitated when I saw it--should I pick it up? Am I being watched by some sort of hidden-camera show to see what people will do when they don't know they're being watched? Since it was only five dollars and since no one around seemed to have lost any money, I picked up, chalking it up to a lucky day for me.
Unfortunately for small-business owners, finding capital isn't as easy. But the good news is that funding is available--if you know where to look. Check out SmartMoney.com's special section on the six best places to find capital for your business.If you know you just need a loan, then this article from a past issue of MyBusiness can help. We break down the difference in the loans available from the Small Business Administration
Unfortunately for small-business owners, finding capital isn't as easy. But the good news is that funding is available--if you know where to look. Check out SmartMoney.com's special section on the six best places to find capital for your business.If you know you just need a loan, then this article from a past issue of MyBusiness can help. We break down the difference in the loans available from the Small Business Administration
Changing the Face of Business Education
Small business is all the rage these days, especially on college campuses. Ten years ago, business programs at most universities were preparing students to work for large corporations, but all that has changed, says this article in the Startup Journal. Many institutions are revamping their business programs to appeal to the desires of a new entrepreneurial-minded generation. So what sparked the shift in business education?
“We’ve got a generation coming up that has a very different outlook on life than the one before it,” Belmont University’s Jeffrey Cornwall told the Startup Journal. “They’re more interested in balancing their work with their family life, and that makes entrepreneurship attractive to them.”
Want to help future entrepreneurs with their studies? Consider sponsoring a scholarship or a student for NFIB’s Young Entrepreneur Awards, given annually each spring to set future small-business owners on the path to entrepreneurship. Find out about other ways NFIB is encouraging young entrepreneurs—and ways you can help—at NFIB.com/YEF.
“We’ve got a generation coming up that has a very different outlook on life than the one before it,” Belmont University’s Jeffrey Cornwall told the Startup Journal. “They’re more interested in balancing their work with their family life, and that makes entrepreneurship attractive to them.”
Want to help future entrepreneurs with their studies? Consider sponsoring a scholarship or a student for NFIB’s Young Entrepreneur Awards, given annually each spring to set future small-business owners on the path to entrepreneurship. Find out about other ways NFIB is encouraging young entrepreneurs—and ways you can help—at NFIB.com/YEF.
A Taxing Situation for Business Owners
The month of April is in full swing, and one dreadful word is on everyone’s mind—taxes. With the deadline looming, many small-business owners find themselves adding extra stress to their load.According to the March Discover Small Business Watch survey, 77 percent of small-business owners find keeping up with taxes a stressful and time-consuming ordeal. In order to avoid the distractions, 73 percent hire a tax professional to take care of the hassle instead.The survey also mentions how small business owners prefer to find a trustworthy accounting firm to file their taxes. For an overview on the survey, check out Andrea Coombes’ article
Southeastern Cities Top List of Best Places for Business
When I worked in New York City for a few years after college, one of my colleagues (who was born and raised in Brooklyn) was fascinated by my Southern roots. She'd never been south of Washington, D.C., and often asked me questions like, "Do you have stores in your town?" I'm sure she was imagining a land of cows pastures and dirt roads. While both of those exist in my hometown, so does a lot of booming industry--which is why for the second year in a row, the Southeast dominated the top 10 list of Forbes magazine's best places for business. Raleigh, N.C., snagged the No. 1 spot, while four other Southern cities ranking in the top 10 as well (including Nashville, Tenn., home of MyBusiness headquarters). Lower business costs, a highly educated workforce and affordable housing are just some of the criteria researchers used to rank the cities. Y'all are welcome to visit any time to see what all the fuss is about.
Small Manufacturers Compete by Innovating
With so many corporate manufacturing plants moving overseas, it seems hard to believe that there is much room for small-business growth in the manufacturing sector. But a recent survey by the Kauffman Foundation proves otherwise. The survey found that manufacturing sales have risen 20 percent between 2002 and 2006 and 70 percent of all U.S. manufacturers have 20 employees or fewer.
So how are they managing to grow despite the overseas competition? According to this article by Phaedra Hines for Fortune Small Business, many successful small manufacturers are coming up with creative ways to produce products rapidly and keep customers happy.
So how are they managing to grow despite the overseas competition? According to this article by Phaedra Hines for Fortune Small Business, many successful small manufacturers are coming up with creative ways to produce products rapidly and keep customers happy.
Reinventing Your Business
So, sales are slow? You've hit a dead end with your business? If either of these concerns have been weighing on your mind lately, it might be time to reinvent your business. Easier said than done, right? According to a Newsday article by Jamie Herzlich, pulling off this magic trick isn't as difficult as it might seem—as long as you take the proper steps and don't go changing your business willy-nilly. Herzlich recommends this strategy:
•Keep your eyes and ears open in the marketplace for signs about which direction to go•Talk to employees, customers and suppliers to isolate the growth opportunities in your business/industry•Evaluate your weaknesses and play your strengths, looking for joint ventures and strategic partnerships with complementary businesses•Test new products/services on existing customers, then look for ways to expand your reach
Glean more insight on how to reinvent your business in our Dec./Jan feature, "Changing Lanes." We explore how owners of a bowling alley, a deli and a document storage and retrieval business took their companies from bust to boom.
•Keep your eyes and ears open in the marketplace for signs about which direction to go•Talk to employees, customers and suppliers to isolate the growth opportunities in your business/industry•Evaluate your weaknesses and play your strengths, looking for joint ventures and strategic partnerships with complementary businesses•Test new products/services on existing customers, then look for ways to expand your reach
Glean more insight on how to reinvent your business in our Dec./Jan feature, "Changing Lanes." We explore how owners of a bowling alley, a deli and a document storage and retrieval business took their companies from bust to boom.
Living Life on Vacation
As school starts around the country for many this week, the realization that summer is almost over sets in. Around this time of year, I always wish I'd have taken just a few more trips--to the lake, to the beach, to anywhere really. For a growing number of Americans, the desire to get away has inspired them to do what most of us just dream about: Pack it all up and move to somewhere fun and fabulous.
This New York Times article (subscription required) explains that "as technology enables people to live and work wherever they want, increasingly they are clustering in resort playgrounds that have natural amenities, good weather--and, now, lots of people like themselves."
The advantages to living in a resort town are endless, I'm sure. Yet the realist in me knows the cost of living can be crazy expensive in a lot of these places. It's an interesting spin on an exit strategy though. And if your small business is portable and your banking account supports it, why not?
This New York Times article (subscription required) explains that "as technology enables people to live and work wherever they want, increasingly they are clustering in resort playgrounds that have natural amenities, good weather--and, now, lots of people like themselves."
The advantages to living in a resort town are endless, I'm sure. Yet the realist in me knows the cost of living can be crazy expensive in a lot of these places. It's an interesting spin on an exit strategy though. And if your small business is portable and your banking account supports it, why not?
Fewer Sign up for Unemployment Benefits
Two thousand fewer people applied for unemployment insurance for the week ending Aug. 18, according to this BusinessWeek article. According to the Department of Labor, this marks the first drop in new unemployment claims in about a month.
The NFIB Research Foundation recently released results of a poll measuring unemployment compensation, also finding fewer workers leaving their place of employment. The poll found that during the last year, nearly half of all small businesses experienced no employee turnover. Seventy-three percent of the small businesses did not fire any workers, and 87 percent did not have to lay anyone off for economic reasons.
The NFIB Research Foundation recently released results of a poll measuring unemployment compensation, also finding fewer workers leaving their place of employment. The poll found that during the last year, nearly half of all small businesses experienced no employee turnover. Seventy-three percent of the small businesses did not fire any workers, and 87 percent did not have to lay anyone off for economic reasons.
Small Businesses Feel Hiring Crunch
My mom and dad have owned a staffing firm for almost 20 years. They're some of the few small-business owners who benefit from extremely low unemployment rates (when businesses have trouble filling open jobs, they're more likely to use a recruiting service). It sounds like the owner of this McDonald's franchise in Helena, Mont., could use my mom and dad's help. According to the AP story, John Francis had such trouble finding workers that he outsourced the drive-thru window to a telemarketing service in Texas.
The NFIB Research Foundation's monthly Small-Business Economic Trends survey (which has tracked small-business hiring plans since its inception in 1986) found that 23 percent of business owners had unfilled jobs in August.
The NFIB Research Foundation's monthly Small-Business Economic Trends survey (which has tracked small-business hiring plans since its inception in 1986) found that 23 percent of business owners had unfilled jobs in August.
The Results Are In
Every month, the Discover Small Business Watch compiles information gathered from telephone interviews and surveys with small-business owners and consumers of small-business products and services. This data helps gauge the levels of economic confidence and the status of business growth and spending according to small-business owners. Such information can help you make informed decisions that will help your business grow and withstand adverse economic conditions. Here are some highlights of August's results:
35 percent said recent changes in the housing market have had a significant impact on their business.
69 percent of small-business owners said they prefer to have their business remain small.
41 percent said they have experienced cash-flow issues in the last 90 days, an increase over last month’s 35 percent.
36 percent of small-business owners feel that economic conditions for their businesses are getting better, a significant decrease from 41 percent in July.
Visit Discover's business Web site to learn more about the August survey.
35 percent said recent changes in the housing market have had a significant impact on their business.
69 percent of small-business owners said they prefer to have their business remain small.
41 percent said they have experienced cash-flow issues in the last 90 days, an increase over last month’s 35 percent.
36 percent of small-business owners feel that economic conditions for their businesses are getting better, a significant decrease from 41 percent in July.
Visit Discover's business Web site to learn more about the August survey.
How Male and Female Business Owners Are Different
Men and women are different--and driving across the country with my husband only reinforced that idea. While I wanted to turn around as soon as we thought we were headed in the wrong direction, make hotel reservations before we arrived in a town, and stop to use the restroom more than once a day--he didn't. Both of our methods for cross-country travel would take one from point A to point B--just in different ways.
So I wasn't surprised at all to see a study released last week from the SBA Office of Advocacy that found while gender doesn't affect new venture performance in a small business, several factors vary between men and women business owners, including expectations, motivations and reasons for starting a business.
So I wasn't surprised at all to see a study released last week from the SBA Office of Advocacy that found while gender doesn't affect new venture performance in a small business, several factors vary between men and women business owners, including expectations, motivations and reasons for starting a business.
Big Corporations Target Small Business
Doesn't it feel good to be appreciated? For years global companies have touted their strategies to lure small-business customers like you. Last week when IBM announced stronger-than-expected third quarter earnings, the company said its sales to small business are making a big difference, according to USA Today's Small Business blog. "I think that took some people by surprise, since IBM is not really known as a small-business vendor," said analyst Charles King, a researcher at Pund-IT. "But they could really get a toe into this market."
Beating the Talent Crisis
Do you know who your high potential workers are today and who your future leaders will be tomorrow? That's the question this CNet News article asks as it explores how businesses can beat the predicted talent crisis our country faces. "The U.S. is estimated to face a 10 million worker shortage in 2010; the 500 largest companies are expected to lose 50 percent of their senior management in five years and the average tenure at one employer for U.S. employees is only three years," Tod Loofbourrow writes.
"Total rewards" packages (which don’t focus exclusively on monetary compensation) are considered one of the best ways to attract and retain star employees. Using benefits to attract talent might depress some small-business owners, whose sky rocketing health-care costs have forced them to cut back--or cut out--health-insurance offerings. But chin up: The article also touches on several ways companies can use culture to instill loyalty among employees.
"Total rewards" packages (which don’t focus exclusively on monetary compensation) are considered one of the best ways to attract and retain star employees. Using benefits to attract talent might depress some small-business owners, whose sky rocketing health-care costs have forced them to cut back--or cut out--health-insurance offerings. But chin up: The article also touches on several ways companies can use culture to instill loyalty among employees.
Consumers Taking Control of Health-Care Costs
We've been living in a rental house for a few months while we're doing some renovations to our home, and I'm embarrassed to admit it--but renting is different. You don't care as much about the carpet, or the yard, or if it takes three tries to hang a picture as you do when it's your house. (Hope my landlord isn't reading this!) I'm confident that I'm a good renter, but having a stake in something changes your perspective. That's exactly what researchers in a new study on consumer-driven health care found, too.
According to a paper published in the Journal of the American Medical Association, CDHPs are "working as intended." The group Consumers for Health Care Choices, which funded the study, says that "all of the empirical evidence shows they are changing patient behavior, which is lowering costs and improving care, and resulting in a sizzling rate of adoption in the market."
That's good news for small-business owners, who have suffered rising health-insurance costs for years. Learn more about all NFIB is doing to help lower costs here.
According to a paper published in the Journal of the American Medical Association, CDHPs are "working as intended." The group Consumers for Health Care Choices, which funded the study, says that "all of the empirical evidence shows they are changing patient behavior, which is lowering costs and improving care, and resulting in a sizzling rate of adoption in the market."
That's good news for small-business owners, who have suffered rising health-insurance costs for years. Learn more about all NFIB is doing to help lower costs here.
Small Business Boosts Economy
In the face of plunging stock prices, a faltering housing market and the soaring cost of gasoline, the fate of the business world does not look promising—unless you’re a small-business owner. According to this New York Times article, a report released by Automatic Data Processing, Inc., and Macroeconomic Advisers reveals that private sector employment is booming, despite the gloom and doom surrounding America’s economic conditions.
Read on to learn how small businesses are keeping the economy afloat and outdoing box stores and large businesses.
Read on to learn how small businesses are keeping the economy afloat and outdoing box stores and large businesses.
The Challenges of Seasonal Businesses
I interviewed the most interesting NFIB member a few weeks ago. The story I was working on was about the rising cost of health care, but during the interview, I spent lots of time learning about this woman's business, the oldest commercial river touring company in the Grand Canyon. Doesn't that sound like a fun business? I immediately envisioned rafting trips and star gazing and being one with nature. Turns out Joy Staveley and her husband, Gaylord, get to do all that--but they also face the same headaches every other business owner faces--affording health insurance, retaining key employees and dealing with government regulations. If you ever daydream of a business you think might be more adventurous than yours, check out this Q&A with the owner of an Alaska tour operation on the WSJ's small-business blog. It gives some great insight on the ups and downs of seasonal businesses.
Thursday, October 29, 2009
Helping the World's Poorest Entrepreneurs
If doing more good was one of your resolutions this year, here's your chance. Kiva is an organization that lets you make microloans to entrepreneurs in the world's poorest countries. You get to pick the business yourself and then loan the money via a credit card. Kiva handles getting the money to partners in the various countries who distribute the money to the business owners. Throughout the payback period, usually six to 12 months, you can receive email journal updates from the business you're helping. Loaning a little can earn great rewards--mostly in the form of a reality check. Because even though owning a small business is the world's hardest job, aren't we lucky to be doing it in the world's greatest country?
Small Business Will Stay Strong in 2008
Despite the woeful tales of real estate crisis, skyrocketing oil prices and tight credit lines surrounding the end of 2007, experts report that the forecast for 2008 is looking slightly brighter—especially for small-business owners. While some small businesses might feel the pressure of a failing housing market and expensive gas prices, few small-business owners have reported problems with credit conditions, says this Entrepreneur.com article.
Gerald Celente, director of the Trends Research Institute, reports that now is the perfect time for small-business owners and entrepreneurs to find their niche, especially with alternative energy poised for a breakthrough.
Having the flexibility to tailor your business to market trends is one great perk of owning your own business. Check out
this article for more information on the 2008 forecast and how it will affect your bottom line.
Keeping Economic Stress Out of the Office
Maybe your business is booming, but that doesn't mean your employees aren't affected by the continued housing woes or the country's potential economic recession. And, chances are, when your employees are experiencing financial problems in their personal lives, the anxiety and emotional overload that sets in can hurt your business—and your bottom line.
When employees at Schaumburg, Ill.-based Quality Float Works, Inc., start to look stressed, vice president Jason Speer offers interest-free loans to help employees get back on track, says this CNN story. By improving their employees' personal lives, Quality Float Works, Inc., makes their home lives easier—and ultimately, that makes for happier, more productive employees.
Are your employees looking worn out or distracted? Check out the article for more information on how you can tell your employees are in financial trouble and what you can do to keep economic problems from intruding into your workplace.
How to Save Money While You Spend It
You have to spend money to make money--and, it turns out, to save money too. As the economy slows, you're probably looking for some belt-tightening measures in your small business. This AP article offers several ideas--the catch is that all of them require you to spend a little upfront.
The Russo Group, a marketing firm in Lafayette, La., hired a CFO whose strict rules reduced expenses by 18 percent in one year. A PR firm in California outsourced all its HR duties to a professional employer organization--a move that saved both time and money. By outsourcing these time-consuming functions, executives could spend more time on their PR business--the best bet for a business trying to stay ahead of a recession.
Wednesday, October 28, 2009
How to Market During a Recession
With every nightly newscast leading with a story about the nation's imminent economic doom, it's hard not to be discouraged about the coming months. If your industry has started to feel the pinch, your initial reaction as a business owner may be to scrap all unnecessary spending--starting with marketing and advertising.
But this article from Harvard Business School's Working Knowledge newsletter discourages that approach. Instead, it emphasizes retooling your campaigns with a more recession-friendly strategy. The eight tips offered here cover ideas like how it's more important than ever to research your customer (don't waste money marketing to the wrong person) and the need to emphasize family values (since we all tend to cozy up at home when we feel uncertain about our economic futures).
11 Tips for Surviving a Down Economy
If you're in real estate, you felt the pinch of a slowing economy months ago. But for many other small business owners, the only indication of a slowdown is in the news. Yet owners like Carol Yenne, who is profiled in this San Francisco Chronicle article, are thinking ahead and taking small steps to protect themselves from any potential setbacks.
For Yenne, it meant waiting to fill shifts left vacant by employees who cut back their hours. Not a drastic move--just one that makes Yenne feel more cautious. Check out these other commonsense tips on how to be smart in times of economic uncertainty.
Green Jobs Bring Life to Sleepy Industrial Towns
This past weekend I traveled to Ohio to visit my family for Easter. During a family party on Saturday night, the conversation inevitably turned to the jobless economy of the small rust belt town where I grew up. if only I had read this Wall Street Journal article before going to visit.
Small industrial towns all over America are suffering the same job losses as my hometown, but it's not time to throw in the towel just yet. According to the article, environmental jobs could be the future for small towns like Hayfork, Calif., which capitalized on green logging in order to bring jobs back to its residents.
Tuesday, October 27, 2009
Carving Out a Niche for Your Business
Not sure how to boost your sales during a slow period? According to this Wall Street Journal article, you have to set yourself apart from your competitors in order to stay on top--and in most cases that means finding a niche in your industry.
Not sure how to find your niche? It might be easier than you think. According to Gayle Clark, owner of Detriot-based Motor City Sales and Services, an automotive repair shop that created a niche by catering to women, finding your niche is as easy as paying attention to your customers' needs. “Don’t just offer whatever your service is," Clark says. “Interact with them and get to know them. They are your foundation and the reason you’re doing what you’re doing.” By taking your clients’ suggestions seriously, you can find a unique place in your industry.
Check out this MyBusiness article to learn more about how Clark created a niche for her business--and how you can find a niche for your business, too.
Not sure how to find your niche? It might be easier than you think. According to Gayle Clark, owner of Detriot-based Motor City Sales and Services, an automotive repair shop that created a niche by catering to women, finding your niche is as easy as paying attention to your customers' needs. “Don’t just offer whatever your service is," Clark says. “Interact with them and get to know them. They are your foundation and the reason you’re doing what you’re doing.” By taking your clients’ suggestions seriously, you can find a unique place in your industry.
Check out this MyBusiness article to learn more about how Clark created a niche for her business--and how you can find a niche for your business, too.
How to "Green" Your Business
You might be tired of hearing constant talk about global warming, buying a hybrid and anything else eco-friendly, but that doesn't mean the green trend is going away any time soon. In fact, America's emphasis on all things green can help your small business weather the current economic downturn--but only if you're willing to take steps to create a more environmental business.
Think "greening" your business sounds too difficult? Think again. According to this USA Today columnist, all it takes is a few easy steps. For example, shutting down computers, printers, fax machines and other electronic office equipment at the end of day can drastically cut your energy consumption--and your electric bill. Ready to take on a greener challenge? The market for green products is exploding, making it the perfect time for your business to start selling an environmental product or service.
The bottom line is this: Now is the perfect time to make money by saving the planet. Check out the column for more ways to make your enterprise--and your bottom line--a little greener.
Think "greening" your business sounds too difficult? Think again. According to this USA Today columnist, all it takes is a few easy steps. For example, shutting down computers, printers, fax machines and other electronic office equipment at the end of day can drastically cut your energy consumption--and your electric bill. Ready to take on a greener challenge? The market for green products is exploding, making it the perfect time for your business to start selling an environmental product or service.
The bottom line is this: Now is the perfect time to make money by saving the planet. Check out the column for more ways to make your enterprise--and your bottom line--a little greener.
How to Sell an Unpopular Product
Business is easy (and even fun) when you have a product or service that everyone wants. But what happens when what you're selling fades in popularity? How do you market products that are no longer popular? That's the focus of this Knowledge@Wharton article which chronicles the trials of a Hummer dealership as well some real estate investors in down markets.
Even if your product isn't considered unpopular, some business owners must overcome consumers' hesitation to buy a new product when the old one they have still works. If that's the case, offering trade-in discounts are a good idea, according to some of these examples.
Even if your product isn't considered unpopular, some business owners must overcome consumers' hesitation to buy a new product when the old one they have still works. If that's the case, offering trade-in discounts are a good idea, according to some of these examples.
How to Fire an Employee
Never fire someone on a Friday. It's one of the rules of business my dad has ascribed to in his almost two decades of owning a small business. His thinking is that if you fire someone on Friday, they'll spend the weekend worrying about their future and brooding over the fact they've been let go. But if you deliver the bad news on a Monday morning, they have the whole week to get their resume together and contact potential leads.
Whether dad's rule is right or not, he follows it because he feels terrible when he has to fire an employee (most of the time). As it turns out, the human resources expert in this Salt Lake Tribune article on making layoffs go more smoothly agrees. From the practical (contact your lawyer first) to the humane aspects (check the calendar and make sure it's not the person's birthday or anniversary), find tips on lessening the blow when you have to let someone go.
Whether dad's rule is right or not, he follows it because he feels terrible when he has to fire an employee (most of the time). As it turns out, the human resources expert in this Salt Lake Tribune article on making layoffs go more smoothly agrees. From the practical (contact your lawyer first) to the humane aspects (check the calendar and make sure it's not the person's birthday or anniversary), find tips on lessening the blow when you have to let someone go.
For Sale Signs Increase as Economy Slumps
If you're looking to sell your business, here's some good news: When people can't find jobs in a tight economy, they're more likely to look into buying one (read: buying your business), says this New York Times article, which cites a 66 percent increase in sales made via bizbuysell.com in the first quarter of 2008 over the same period last year.
Now for the bad news: It's a buyer's market, the article says, which means if you are looking to sell, you're going to have to settle for less money.
Now for the bad news: It's a buyer's market, the article says, which means if you are looking to sell, you're going to have to settle for less money.
Keeping Employees Happy
With the bleak economic picture these days, you can’t afford to lose employees. But tough times call for tough measures—and sometimes that can mean suspending bonuses, cutting benefits and the like. When this happens, how do you keep employees from looking elsewhere for better opportunities? You might get some ideas by checking out this article in the Chicago Tribune. Learn how a one store was able to keep its best employees from jumping ship after massive layoffs, and how another business keeps employees motivated through sluggish sales periods.
When It's Time To Move Your Small Business Back Home
Lots of small business owners consider it a major milestone when they move their startups from their homes into their own office space. But in a tough economy, some entrepreneurs are making the decision to go home again. This AP article profiles a young startup that returned to the founder's New York City apartment when cash flow became tight. But owner Robin Stein is staying positive: "We need to be cautious so that we can manage this stage in business," Stein said. "I think we'll be fine in the long run."
If you're considering downsizing office space or returning to your home-based roots, don't consider it a sign of failure. Some owners end up being even more productive at home after they cut out the wasted time commuting to and from the office.
If you're considering downsizing office space or returning to your home-based roots, don't consider it a sign of failure. Some owners end up being even more productive at home after they cut out the wasted time commuting to and from the office.
A Bright Look at the Economy
No matter which news station I watch or newspaper I pick up, it seems that every media outlet only offers a bleak economic forecast. That's why I was intrigued when I saw this article on BusinessWeek.com, which argues against getting overly concerned about the economy.
The article points to a recent op-ed in the Wall Street Journal entitled "Life is Good, So Why Do We Feel So Bad?," which states, "It would seem that there really are two...American economies—the real economy and the perceived one." The article also points to a 2007 poll asking Americans if they consider themselves part of America's "haves" or "have-nots." Surprisingly, 75 percent of respondents consider themselves part of America's "haves."
Obviously higher fuel and food prices, and a slumping market spell out some trouble for small business owners and other Americans, but it's nice to hear a different viewpoint of the economy. Check out the article for on our economy's bright side.
The article points to a recent op-ed in the Wall Street Journal entitled "Life is Good, So Why Do We Feel So Bad?," which states, "It would seem that there really are two...American economies—the real economy and the perceived one." The article also points to a 2007 poll asking Americans if they consider themselves part of America's "haves" or "have-nots." Surprisingly, 75 percent of respondents consider themselves part of America's "haves."
Obviously higher fuel and food prices, and a slumping market spell out some trouble for small business owners and other Americans, but it's nice to hear a different viewpoint of the economy. Check out the article for on our economy's bright side.
How Customers Can Help Offset Your Business' Carbon Footprint
Just yesterday I was picking up a few things from the grocery store and remembered that I was out of dishwashing liquid. Quickly scanning the shelves I found my favorite brand of ecofriendly soap. I also noticed that I was paying a good bit more for it than the other well-known brands my mom has used my entire life. But I'm willing to do it. Protecting the environment and my family from harsh chemicals is worth a few more dollars.
The owners of this civil- and environmental-engineering firm are banking on the idea that a lot of other Americans are like me--willing to pay a little more to help the environment. The Wall Street Journal explains how Sherwood Design Engineers charges clients an extra 0.05 percent of their bill to put toward renewable-energy credits. So far, no customers have balked at the fee, says Bry Sarte, the firm's chief executive.
The owners of this civil- and environmental-engineering firm are banking on the idea that a lot of other Americans are like me--willing to pay a little more to help the environment. The Wall Street Journal explains how Sherwood Design Engineers charges clients an extra 0.05 percent of their bill to put toward renewable-energy credits. So far, no customers have balked at the fee, says Bry Sarte, the firm's chief executive.
Think Twice Before Cutting Jobs in a Bad Economy
Worried you're going to have to let go of that new salesman or customer service representative you just hired a year ago? Think again, says Smart Money: "Conduct layoffs now, and you'll spend even more to train a whole new batch once the economy picks back up."
Instead, the smsmallbiz.com article suggests ways to cut back on payroll, either by reassigning tasks to an employee whose workload has dried up, reducing hours and wages and even asking for volunteers for a temporary (unpaid) leave of absence.
Are these the best solutions to the problem? Not by a long shot— but they sure beat having to let go a loyal, trained employee.
Instead, the smsmallbiz.com article suggests ways to cut back on payroll, either by reassigning tasks to an employee whose workload has dried up, reducing hours and wages and even asking for volunteers for a temporary (unpaid) leave of absence.
Are these the best solutions to the problem? Not by a long shot— but they sure beat having to let go a loyal, trained employee.
Starting Up in a Slow Economy
An economic slowdown is no excuse for putting business plans on hold, according to day's Tools and Tips article on NFIB.com. Just think: If you're scared to launch a new startup, so is everyone else--and taking the chance when others aren't willing to could give you a corner on the market. Here are a few advantages of starting a business when the economy is slow:
Less Competition. If things are slow in the business sector, your new enterprise is more likely to catch buyers' attention.
Slowdown coincides with development phase. Since the economy is slow, you'll have some time to work out the kinks in your new business. By the time things speed up, your business will be a well-oiled machine.
Better deals for businesses. Other businesses will be offering deals on the supplies you need to launch your startup.
Check out the article for more information on launching a successful startup now.
Less Competition. If things are slow in the business sector, your new enterprise is more likely to catch buyers' attention.
Slowdown coincides with development phase. Since the economy is slow, you'll have some time to work out the kinks in your new business. By the time things speed up, your business will be a well-oiled machine.
Better deals for businesses. Other businesses will be offering deals on the supplies you need to launch your startup.
Check out the article for more information on launching a successful startup now.
6 Ways to Trim Payroll Without Cutting Jobs
Almost half of small business owners polled in a recent survey said they plan to lay off workers, stop raises or offer days off instead of wage increases as a result of the slowing economy, according to this Wall Street Journal article.
But while trimming payroll might seem like the easiest move when times are tough, the article suggests business owners might want to think twice before handing out pink slips. Employees are valuable, especially skilled ones you've trained.
I liked the ideas such as switching up duties (why can't an account supervisor also help empty trash cans?), asking for volunteers who might want an extended amount of unpaid leave for the promise of their job back in a few months, or cutting your work week from five days to four.
But while trimming payroll might seem like the easiest move when times are tough, the article suggests business owners might want to think twice before handing out pink slips. Employees are valuable, especially skilled ones you've trained.
I liked the ideas such as switching up duties (why can't an account supervisor also help empty trash cans?), asking for volunteers who might want an extended amount of unpaid leave for the promise of their job back in a few months, or cutting your work week from five days to four.
Small Business Owners Are not Indicating a Credit Crunch, Despite New York Times Trend Story
Like you, I don't like to read news articles that clearly display the reporter did not let something as inconvenient as facts get in the way of their trend story. For example, yesterday The New York Times ran a trend story with the alarming headline, "Worried Banks Sharply Reduce Business Loans." Wow, that's a scary headline. I know it scared me. As editor of MyBusiness magazine, I was scared that we'd totally missed a major story--banks are sharply reducing business loans and we missed it? But wait, I reassured myself, we have access to continuous research from NFIB measuring small business owners' experiences in trying to access capital and our latest numbers show that, while owners are clearly not optimistic about the economy, they are not yet indicating the credit crunch being reported in The Times.
Here's a sampling of The New York Times' lede:
"Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring....The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt."
The story focuses on an anecdote involving Wachovia Bank turning down a business loan for the purchase of a robot--implying that a rigid business loan market was the cause and that this is part of a greater trend. I was about to start tracking down why the research we track was so out-of-sync with the Times story, when I read this nugget in the story:
"Still, Wachovia’s commercial and industrial loans grew by 13 percent in June compared with the prior year..."
In other words, The New York Times article contains facts that clearly refute the story's headline and lede--but they didn't let that get in the way of a good trend story.
For the record, small business owners are not very optimistic these days, but access to capital is not yet showing up as a major concern in the longest-running continuous survey of small business owner optimism, NFIB's Small Business Economic Trends survey. The current monthly survey reveals the following:
"The net percent of owners reporting loans harder to get in recent months fell one point to a net 7 percent (8 percent said "harder," 1 percent said "easier"). The average reading since September's surprise Fed rate hike is 7 percent. Only 2 percent of the owners cited the cost and availability of credit as their No. 1 business problem (down 1 point), far from the record 37 percent reached in 1982. Thirty-five percent reported all their borrowing needs met (up one point) compared to 5 percent who reported problems obtaining desired financing (down two points), a three-point improvement in the net percent reporting all needs met. The remainder did not want to borrow.
So, to sum things up, The New York Times today reported that "worried banks are sharply reducing business loans," while the most current survey of small business owners reports that, compared to previous recessionary times, concern about access to capital is actually falling. Of course, this could change next month--and it likely will, if people start believing what they read in headlines of The Times.
Here's a sampling of The New York Times' lede:
"Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring....The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt."
The story focuses on an anecdote involving Wachovia Bank turning down a business loan for the purchase of a robot--implying that a rigid business loan market was the cause and that this is part of a greater trend. I was about to start tracking down why the research we track was so out-of-sync with the Times story, when I read this nugget in the story:
"Still, Wachovia’s commercial and industrial loans grew by 13 percent in June compared with the prior year..."
In other words, The New York Times article contains facts that clearly refute the story's headline and lede--but they didn't let that get in the way of a good trend story.
For the record, small business owners are not very optimistic these days, but access to capital is not yet showing up as a major concern in the longest-running continuous survey of small business owner optimism, NFIB's Small Business Economic Trends survey. The current monthly survey reveals the following:
"The net percent of owners reporting loans harder to get in recent months fell one point to a net 7 percent (8 percent said "harder," 1 percent said "easier"). The average reading since September's surprise Fed rate hike is 7 percent. Only 2 percent of the owners cited the cost and availability of credit as their No. 1 business problem (down 1 point), far from the record 37 percent reached in 1982. Thirty-five percent reported all their borrowing needs met (up one point) compared to 5 percent who reported problems obtaining desired financing (down two points), a three-point improvement in the net percent reporting all needs met. The remainder did not want to borrow.
So, to sum things up, The New York Times today reported that "worried banks are sharply reducing business loans," while the most current survey of small business owners reports that, compared to previous recessionary times, concern about access to capital is actually falling. Of course, this could change next month--and it likely will, if people start believing what they read in headlines of The Times.
Small Business is the Nation's Job Creation Engine -- But You Knew That
Around here, we remind people all the time that "Small Business is the nation's job-creation engine." Today, there's a great example of what we mean. According to a study released today by the payroll management firm, ADP, the private sector added a net 9,000 jobs in July.
While that growth in job surprised most experts, one thing didn't surprise us: Where all those net new jobs are coming from. Here's the key quote from the report:
"Growth was also helped by 50,000 jobs added by small businesses. By contrast, large businesses shed 32,000 positions."
Does this surprise you? Not if you run a small business.
While that growth in job surprised most experts, one thing didn't surprise us: Where all those net new jobs are coming from. Here's the key quote from the report:
"Growth was also helped by 50,000 jobs added by small businesses. By contrast, large businesses shed 32,000 positions."
Does this surprise you? Not if you run a small business.
IRS Deadline Approaches for Business Owners Setting Up Employee Benefit Plans
If you're thinking about setting up a retirement plan for employees, the clock is ticking: Oct. 1 is the IRS deadline for when employers must set up a SIMPLE (Savings Incentive Match Plan for Employees). If you received a filing deadline extension for your 2007 returns then you have until Oct. 15 to set up a SEP (Simplified Employee Pension) in order to take a deduction for the 2007 tax year. Oct. 15 is also the date that 2007 contributions must be made to both plans for anyone who received a 2007 extension.
Confused about what all that means? Check out this Chicago Tribune article for a primer on different retirement plans for your staff. You might be surprised to learn why experts say a down market isn't a good excuse to avoid setting up or contributing to such plans.
Confused about what all that means? Check out this Chicago Tribune article for a primer on different retirement plans for your staff. You might be surprised to learn why experts say a down market isn't a good excuse to avoid setting up or contributing to such plans.
The Bright Side to a Bleak Economy
There's a bright side to everything—even the bad economy. For some small business owners, the rough economic waters are providing new opportunities—to grow into new markets, to expand globally, to run leaner, and the list goes on.
Don't believe it? Just read this article posted today on Smart Money.com. It profiles three small businesses where opportunity knocked despite the slump. The current issue of MyBusiness features a similar article, offering tips on navigating a downturn for any business—with an opportunity or not.
Don't believe it? Just read this article posted today on Smart Money.com. It profiles three small businesses where opportunity knocked despite the slump. The current issue of MyBusiness features a similar article, offering tips on navigating a downturn for any business—with an opportunity or not.
Taking Your Business Global
For family business owners like Phil and Michell Wadzinski, who run Pecard Chemical, a company that specializes in leather care products, the thought of entering the global market seems impossible--especially in a down economy. But when the Wadzinski's won a Fortune Small Business Makeover, they realized that unprecedented growth is usually only a few steps away.
Expert business consultants spent a few days analyzing Pecard Chemical and brainstorming new ways to brand the company and help it expand rapidly. Ready to take your business to the next level? Watch this video to see how one small business found a way to grow.
Expert business consultants spent a few days analyzing Pecard Chemical and brainstorming new ways to brand the company and help it expand rapidly. Ready to take your business to the next level? Watch this video to see how one small business found a way to grow.
Seven Ways to Survive a Credit Crunch
Having trouble getting a loan? You're not alone. With the credit crunch right now, many small business owners are struggling to borrow money. You can't turn the economy around, but you can take steps to lessen the pain to your bottom line. In today's Tools and Tips section of NFIB.com, Chief Economist William Dunkelburg suggests seven ways to keep your capital flowing during a credit crisis. From determining how the country's mortgage crisis really affects your loans to renewing your relationship with your banker, use these simple tips as a starter guide for helping you stay afloat when the economy tanks.
Growing in a Recession
Last week's $700 economic relief package should help bring an end to the economic downturn soon, says this Inc.com article. Although small business was never affected as heavily by the credit crunch as Wall Street, recent changes in the economy have left many entrepreneurs apprehensive about the future of their companies. Luckily, the recently passed legislation should free up credit for small business owners and consumers, as well as provide $100 billion in tax breaks for entrepreneurs.
According to NFIB President and CEO Todd Stottlemyer, "While small business owners have strong and conflicting feelings about the rescue package, in the end, their ability to grow their businesses depends upon stability and liquidity in the financial markets,"
Even while you wait for the market to stabilize, you can plan future growth for your business. Check out this Entrepreneur.com article for tips on growing during a recession.
According to NFIB President and CEO Todd Stottlemyer, "While small business owners have strong and conflicting feelings about the rescue package, in the end, their ability to grow their businesses depends upon stability and liquidity in the financial markets,"
Even while you wait for the market to stabilize, you can plan future growth for your business. Check out this Entrepreneur.com article for tips on growing during a recession.
Weathering Economic Turmoil
The economy may be in a downturn, but you wouldn't know it by the atmosphere at Allentown Brew Works in Allentown, Pa. The restaurant is doing as much business as before, thanks to smart decisions by its management: taking expensive, low-profit items off the menu, for instance, while keeping ingredients fresh for cheaper entrees. Other business owners, too, may be spooked by the economy, but by refusing to sacrifice quality, they are keeping their businesses thriving, according to an Entrepreneur.com article featured on MSNBC.com.
"Right now, when we might be tanking because of the economy, when people are choosing between buying gas and eating out, they're finding us as the one place where they still want to treat themselves," Vincent Williams, owner of two franchise restaurants in Los Angeles, Calif., was quoted as saying. If the Wall Street crisis hasn't hit your business yet, chances are it's on its way. To learn more about how to keep your business steady through the economic turmoil, check out the six survival strategies that the article goes on to offer.
"Right now, when we might be tanking because of the economy, when people are choosing between buying gas and eating out, they're finding us as the one place where they still want to treat themselves," Vincent Williams, owner of two franchise restaurants in Los Angeles, Calif., was quoted as saying. If the Wall Street crisis hasn't hit your business yet, chances are it's on its way. To learn more about how to keep your business steady through the economic turmoil, check out the six survival strategies that the article goes on to offer.
Small Business Owners Refuse to Panic, Their Optimism Ticks Up
NFIB today released a special version of its decades-old monthly survey of Small Business Economic Trends. Before Monday, Sept. 15, there had been "dramatic improvements in the percent of small business owners expecting the economy to improve over the next six months and solid plans to invest in new inventories accounted for that early surge," said NFIB Chief Economist William Dunkelberg.
On Sept. 15, however, the investment banking firm Lehman Brothers filed for bankruptcy, dramatically illustrating the degree to which the nation's credit system was on the brink of collapse.After Sept. 15, small business optimism was hammered by the events in Washington and New York and the steady growing media coverage of the panic. The mood of small business owners turned markedly downward at that point and subsequently plans to create jobs and invest in inventories or capital expansion fell (reducing loan demand).
Despite that set back, the Index of Small Business Optimism rose 1.8 points to 92.9. However, 92.9 is still considered a recessionary level index, so September continues one of the longest strings of recession-level readings in the history of the survey that started in 1973.Still, it is heartening to see small business owners -- who understand the real Main Street economy better than those on Wall Street, believing in the continuing potential of their businesses.
On Sept. 15, however, the investment banking firm Lehman Brothers filed for bankruptcy, dramatically illustrating the degree to which the nation's credit system was on the brink of collapse.After Sept. 15, small business optimism was hammered by the events in Washington and New York and the steady growing media coverage of the panic. The mood of small business owners turned markedly downward at that point and subsequently plans to create jobs and invest in inventories or capital expansion fell (reducing loan demand).
Despite that set back, the Index of Small Business Optimism rose 1.8 points to 92.9. However, 92.9 is still considered a recessionary level index, so September continues one of the longest strings of recession-level readings in the history of the survey that started in 1973.Still, it is heartening to see small business owners -- who understand the real Main Street economy better than those on Wall Street, believing in the continuing potential of their businesses.
Small Business Takes Center Stage in Debate
Small business owners rarely steal the spotlight. Most of the time, they're the kind of people who stay behind the scenes, toiling away in a darkened warehouse or office after hours, on weekends and through holidays to keep their companies going while everyone else is enjoying time off. They are the first to arrive, the last to leave and the least likely to expect attention—much less national attention—for their sacrifices. But during last night's final presidential debate between John McCain and Barack Obama, one aspiring entrepreneur, Joe Wurzelbacher, a Toledo, Ohio, man planning on buying the small plumbing business he currently works for, thrust the concerns of small business owners into the forefront of the race.
The candidates referred to Wurzelbacher, who recently met Obama at a campaign stop and questioned him about how his tax plan would affect his future business, a total of 23 times as they squared off over the economy, health-care and other domestic issues. So who is "Joe the plumber," and why does his story matter? Check out this analysis in U.S. News & World Report. You can also find out more about where the candidates stand on the issues that matter to your business in our latest issue of MyBusiness.
The candidates referred to Wurzelbacher, who recently met Obama at a campaign stop and questioned him about how his tax plan would affect his future business, a total of 23 times as they squared off over the economy, health-care and other domestic issues. So who is "Joe the plumber," and why does his story matter? Check out this analysis in U.S. News & World Report. You can also find out more about where the candidates stand on the issues that matter to your business in our latest issue of MyBusiness.
Price of commodities still pinching businesses
Last night I heard on the news that the average price of a gallon of gas is under $3. Sure enough, when I drove by the gas station on my way to work this morning, the prices had dropped. Which makes sense: It costs less, so businesses should charge less. But that's not the case with all commodities, says this Wall Street Journal article.
Despite the fact that the price of commodities like corn, natural gas and chemicals have fallen, the small companies that purchase them still haven't experienced the price drop.
If this sounds like your business, check out the article for tips on how you can lower costs while you wait for the price you pay to drop.
Despite the fact that the price of commodities like corn, natural gas and chemicals have fallen, the small companies that purchase them still haven't experienced the price drop.
If this sounds like your business, check out the article for tips on how you can lower costs while you wait for the price you pay to drop.
SBA Encourages Lenders to Offer Loan Deferment Relief
In wake of the financial crisis, access to credit and capital has tightened, leaving many small business owners wondering how they will find the resources they need to keep their doors open. In a response to the tightening of credit markets, the SBA announced yesterday that it encourages its participating lenders to offer small businesses borrowers the flexibility they need to keep cash on hand.
"The SBA is here to help small businesses during these difficult economic times. We are encouraging our lending partners to follow suit by extending three-month payment deferments on their SBA guaranteed loans to qualified borrowers who need relief," said SBA Acting Administrator Sandy K. Baruah, according to this MarketWatch.com article. "We recognize that small business owners are faced with challenging decisions right now. By providing three-month deferments to qualifying borrowers who are struggling, our lending partners can help small business owners free up the capital they need to maintain their businesses."
Read on for more information about SBA's call for financial relief for small business, or click here for more information about SBA's programs for small business.
"The SBA is here to help small businesses during these difficult economic times. We are encouraging our lending partners to follow suit by extending three-month payment deferments on their SBA guaranteed loans to qualified borrowers who need relief," said SBA Acting Administrator Sandy K. Baruah, according to this MarketWatch.com article. "We recognize that small business owners are faced with challenging decisions right now. By providing three-month deferments to qualifying borrowers who are struggling, our lending partners can help small business owners free up the capital they need to maintain their businesses."
Read on for more information about SBA's call for financial relief for small business, or click here for more information about SBA's programs for small business.
Entrepreneurs Can Save the Economy
We all hear the gloom-and-doom news on a daily basis about the economic downturn, but here's some good news to take to the bank: A majority of Americans still believe in small business. In fact, most Americans believe small business owners are more likely to rescue our economy than any government, nonprofit or corporate institution.
In a recent poll sponsored by the Kauffman Foundation, 70 percent of registered voters surveyed said that the health of the economy rests on the success of entrepreneurs; and more than 60 percent said they had more faith in small business owners to guide the U.S. economy than congressional leaders or Fortune 500 CEOs. Of course, the only downside to the survey was that more Americans expressed reluctance to start a business right now. Though more than half of the survey's respondents reported seeing opportunities for starting a business, only a quarter said they would actually consider it in the next five years.
What role do small businesses owners really play in the economy and how can they save us from the current economic crisis? Check out this commentary by Kauffman Foundation president Carl J. Schramm, who outlines the answers to these questions in an in-depth analysis on CNN.com.
In a recent poll sponsored by the Kauffman Foundation, 70 percent of registered voters surveyed said that the health of the economy rests on the success of entrepreneurs; and more than 60 percent said they had more faith in small business owners to guide the U.S. economy than congressional leaders or Fortune 500 CEOs. Of course, the only downside to the survey was that more Americans expressed reluctance to start a business right now. Though more than half of the survey's respondents reported seeing opportunities for starting a business, only a quarter said they would actually consider it in the next five years.
What role do small businesses owners really play in the economy and how can they save us from the current economic crisis? Check out this commentary by Kauffman Foundation president Carl J. Schramm, who outlines the answers to these questions in an in-depth analysis on CNN.com.
Cut Costs With Technology
While small business owners recognize the importance of using resources diligently all the time, cutting costs has become even more critical during this economic downturn. There are various changes you can make in your daily work routine to be more cost-efficient, but Small Biz Technology offers some ideas on how you can use technology (some of which you might already have) to help save money:
Use video-conferencing software instead of flying to meetings- Scan and send large documents instead of using a courier service
- Use laptops instead of desktops and separate monitors to decrease energy costs
- If your business is outgrowing its current location but you don't want to take on the costs of moving right now, encourage employees to work from home if possible. Added bonus: Employees save on fuel costs, too.
How to Hold on in a Bad Economy
Scratching your head trying to figure out which way the economy is headed? This week's record-low gas prices might have you seeing clear skies ahead. On the other hand, looking at how trading closed on Wall Street today and you might think there's no end in sight to this slowdown.
Predicting where we go from here should be neither here nor there for small business owners. What you should be concentrating on, says this New York Times article, is taking proactive steps to protect your business—no matter what happens with the economy.
Some of the article's tips might seem a little been-there-done-that (study your competition, know your market, work extra hard), but it doesn't hurt to hear them again when you're struggling to survive.
Predicting where we go from here should be neither here nor there for small business owners. What you should be concentrating on, says this New York Times article, is taking proactive steps to protect your business—no matter what happens with the economy.
Some of the article's tips might seem a little been-there-done-that (study your competition, know your market, work extra hard), but it doesn't hurt to hear them again when you're struggling to survive.
Quarterly Trends Display Challenges Facing Small Business
This morning, the Small Business Administration's Office of Advocacy released its "third quarter trends" analysis. While these trends have been reported previously, seeing them all together underscores the challenging times small businesses in the U.S. are moving through. Following are the major trends, according to the report. (A PDF of the full report can be downloaded at the SBA Office of the Advocacy website.)
· The U.S. economy experienced weaknesses in the third quarter, as real gross domestic product fell 0.3 percent. Consumers, who helped lift GDP in the second quarter with their economic stimulus checks, reduced their spending by an annualized 3.1 percent in the third quarter, and real gross private domestic investment continued to fall, with an annualized 1.9 percent decline. Real exports remained strong, growing an annualized 5.9 percent; real imports declined 1.9 percent annually, resulting in an improved trade deficit. Meanwhile, manufacturing output declined, with the Institute for Supply Management’s manufacturers’ purchasing index down from 50.2 in June to 43.5 in September and the Federal Reserve’s industrial production index down an annualized 6.0 percent.
· Small business owners and consumers are pessimistic about the economy, with the University of Michigan’s consumer sentiment survey and the National Federation of Independent Business’s optimism index lower than desired. According to the NFIB survey, the next three months are not a good time to expand operations, to hire new workers, or to invest in new capital projects.
· The unemployment rate in August and September rose to 6.1 percent, its highest point since September 2003, and the U.S. economy has lost jobs each month in 2008, with 760,000 fewer nonfarm payroll jobs since December 2007. Every industry has seen employment losses, with the exception of four – education and health services, government, natural resources and mining, and other services. Some of the hardest hit industries were construction, manufacturing, retail trade, financial activities, and professional and business services. In the third quarter, unincorporated self-employment fell from 10.5 to 10.1 million; incorporated self-employment remained around 5.8 million.
· The Federal Reserve has expressed concern about weaknesses in the economy and in the credit markets. It has worked closely with the U.S. Treasury and Congress to shore up the health of banking and other financial institutions and to stimulate the economy. (The Emergency Economic Stabilization Act was enacted on October 3, and the Federal Reserve cut the federal funds target rate by another 50 basis points on October 29. The prime rate is now 4.25 percentage points lower than in September 2007.) Small business lending demand remains weak, according to the Federal Reserve’s Senior Loan Officers’ Survey, and venture investment has also fallen in the third quarter.
· Inflation remains an issue, although growth in producer prices has tapered off. Consumer prices rose an annualized 6.7 percent in the third quarter; when energy and food prices were excluded, the consumer price index grew 3.2 percent annually. The producer price index, which increased nearly 14 percent between September 2007 and September 2008, was up an annualized 2.5 percent in the third quarter. Wages and salaries and the cost of providing benefits rose 2.2 percent and 2.3 percent, respectively, on an annualized basis. The price of oil has fallen dramatically since peaking at over $145 per barrel in July. The average cost of West Texas crude was $103.90 in September. (It fell further to around $66 a barrel by the end of October.) Nonfarm labor productivity grew an annualized 1.1 percent in the third quarter.
· The U.S. economy experienced weaknesses in the third quarter, as real gross domestic product fell 0.3 percent. Consumers, who helped lift GDP in the second quarter with their economic stimulus checks, reduced their spending by an annualized 3.1 percent in the third quarter, and real gross private domestic investment continued to fall, with an annualized 1.9 percent decline. Real exports remained strong, growing an annualized 5.9 percent; real imports declined 1.9 percent annually, resulting in an improved trade deficit. Meanwhile, manufacturing output declined, with the Institute for Supply Management’s manufacturers’ purchasing index down from 50.2 in June to 43.5 in September and the Federal Reserve’s industrial production index down an annualized 6.0 percent.
· Small business owners and consumers are pessimistic about the economy, with the University of Michigan’s consumer sentiment survey and the National Federation of Independent Business’s optimism index lower than desired. According to the NFIB survey, the next three months are not a good time to expand operations, to hire new workers, or to invest in new capital projects.
· The unemployment rate in August and September rose to 6.1 percent, its highest point since September 2003, and the U.S. economy has lost jobs each month in 2008, with 760,000 fewer nonfarm payroll jobs since December 2007. Every industry has seen employment losses, with the exception of four – education and health services, government, natural resources and mining, and other services. Some of the hardest hit industries were construction, manufacturing, retail trade, financial activities, and professional and business services. In the third quarter, unincorporated self-employment fell from 10.5 to 10.1 million; incorporated self-employment remained around 5.8 million.
· The Federal Reserve has expressed concern about weaknesses in the economy and in the credit markets. It has worked closely with the U.S. Treasury and Congress to shore up the health of banking and other financial institutions and to stimulate the economy. (The Emergency Economic Stabilization Act was enacted on October 3, and the Federal Reserve cut the federal funds target rate by another 50 basis points on October 29. The prime rate is now 4.25 percentage points lower than in September 2007.) Small business lending demand remains weak, according to the Federal Reserve’s Senior Loan Officers’ Survey, and venture investment has also fallen in the third quarter.
· Inflation remains an issue, although growth in producer prices has tapered off. Consumer prices rose an annualized 6.7 percent in the third quarter; when energy and food prices were excluded, the consumer price index grew 3.2 percent annually. The producer price index, which increased nearly 14 percent between September 2007 and September 2008, was up an annualized 2.5 percent in the third quarter. Wages and salaries and the cost of providing benefits rose 2.2 percent and 2.3 percent, respectively, on an annualized basis. The price of oil has fallen dramatically since peaking at over $145 per barrel in July. The average cost of West Texas crude was $103.90 in September. (It fell further to around $66 a barrel by the end of October.) Nonfarm labor productivity grew an annualized 1.1 percent in the third quarter.
The Bright Side of a Downturn
If you're like me, hearing daily reports of the falling stock market, the sub-prime mortgage lending crisis, economic bailouts and failing banks is starting to get a little old--okay, really old. Ready to look at the bright side? According to Thomas Nelson President and CEO Michael Hyatt's latest blog post, a recession isn't all that bad.
Here's why: A recession thins out the competition, makes entrepreneurs more creative and makes you less wasteful, among other things. Read on for more reasons why an economic slump isn't the end of the world for small business owners.
Here's why: A recession thins out the competition, makes entrepreneurs more creative and makes you less wasteful, among other things. Read on for more reasons why an economic slump isn't the end of the world for small business owners.
Monday, October 26, 2009
Why Fear Makes Economic Slowdown Worse
One of my favorite (and most memorable) articles that has been featured in MyBusiness since I've been working for the magazine is a piece by Harvey King on the FEARS virus. Harvey wrote it for us around the same time the SARS virus was a threat. Even though the piece is more than five years old and the word "SARS" hasn't been uttered in at least three of those years, I think the article is definitely worth revisiting. And I think Tim Berry, a blogger over at Entrepreneur.com, would agree.
Last week he posted about the economy and small business—and how bad it really is. And no, it's not as bad as you probably think. He says, "When things are up, they seem more up than what they really are; and when things are down, they seem worse. Reality is somewhere in between."
In other words, don't freak out. That'll only make things worse. Instead, use that energy to recession-proof your business.
Last week he posted about the economy and small business—and how bad it really is. And no, it's not as bad as you probably think. He says, "When things are up, they seem more up than what they really are; and when things are down, they seem worse. Reality is somewhere in between."
In other words, don't freak out. That'll only make things worse. Instead, use that energy to recession-proof your business.
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