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SMALL BUSINESS TRENDS brings you daily updates on trends that influence the global small business market.
Anita Campbell, Editor
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Tuesday, August 31, 2004
Small Business Influence in the United Kingdom
Here's more evidence of the power of small business across the globe.

U.K. Businesses 2003

A just-released report by the Small Business Service (PDF download) in the United Kingdom shows that small and midsize enterprises (SMEs) constitute the vast majority of businesses there -- 99.8%.

That's more or less equivalent to the situation in the United States, where small businesses make up 99.7% of total businesses.

As the chart above shows, SMEs account for over half (58.2%) of the employment in the U.K. They account for 52.4% of turnover (revenue).

[Hat tip to ByteStart, via Just for Small Business].
Monday, August 30, 2004
Bookstores Discover the "Shopping Experience"
Large corporations keep growing ever larger, yet small retailers seem to find ways to compete with them somehow. One trend we see is that small businesses are simply getting savvier at providing a great shopping experience and unparalled customer service.

The Wall Street Journal had an interesting article by Jeffrey A. Trachtenberg (subscription required) offering an example of this in one industry, bookselling. The article profiles a core group of independent booksellers that are competing successfully against the big chain booksellers. Many of their stores offer full-service restaurants and sell items other than just books and digital media.

James Surowiecki over at the Marginal Revolution blog adds his insights on why these bookstores are successful:
What the really successful independent stores do is combine consumer friendliness in terms of design, space, and amenities with the kind of knowledgeable and dedicated staff that's traditionally thought of as characteristic of independents. I think there's a plausible argument that independent stores underestimated initially how important the experience of shopping was to customers.


These stores are also taking advantage of a genuine market opportunity by being active intermediaries between their customers and book publishers. (Amazon does it via collaborative filtering, while brick-and-mortar rely on staff members.) The real challenge for readers today is figuring out which of the tens of thousands (or more) of books published every year is worth their time.
I think these points are right on. In the United States today shopping can be overwhelming and lead to sensory overload. As consumers we want choice, but we also get overwhelmed by too many choices. Retailers who take some of the stress out of shopping, and who help us choose among an overwhelming array of choices, add real value to our lives.

And let's face it. We Americans are a consumer culture. Shopping is less about need than about want. We look for shopping to make us feel good and even provide entertainment for us.

Savvy small retailers have always understood the value of great customer service and some have even understood the value of creating a fun, enjoyable shopping experience. In this era of chain stores on every corner and endless options for price shoppping, we see a trend toward these two factors -- superior customer service and a great shopping experience -- as increasingly necessary for success. Without them, small retailers could find it difficult to compete with the big guys.
Sunday, August 29, 2004
PowerBlog Review: Ego Blog

Editor's note: We're excited to present the twenty-eighth in our popular weekly series of PowerBlog Reviews of other weblogs...

The Ego blog is a Swedish blog written entirely in English by Martin Lindeskog. Martin blogs from Sweden's industrial port city of Gothenburg.

As its title suggests, the writings in the Ego blog are based on the philosophies of "Reason - Egoism - LaissezFaire Capitalism." This is a blog very much about Ayn Rand Objectivism and capitalism in its purest sense. The following quote of Ayn Rand sums up the philosophy and gives a clue as to how Martin got the name for his blog:

"My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute." - Ayn Rand
The Ego blog has one of the most intriguing logos of any blog I've seen. The logo illustrates the kind of cross-promotion you see so often in the blogosphere, having been created by the Cox and Forkum political cartoonists, whose cartoons frequently appear in blogs. The Cox and Forkum duo describe what they intended to convey with the logo in this online interview:

FORKUM: The initial idea for the logo was a graphic solution using the word "ego" to form a person's face, but the results didn't really connote egoism strongly enough. I knew John could illustrate a heroic, proud man so that is the tack we took. ***

COX: Heroic was what I was shooting for. There was power in his stance that I think captured a sense of joy and determination.

The Ego blog covers high-level intellectual ideas, but manages to make them seem relevant. The blog is always tied to current news and events, and is never academic.

Another terrific feature of this blog is the great set of links. Naturally you'll find links to the usual suspects: blog directories, other blogs, news sites, etc. But you will also find extensive links to sites on capitalism, Objectivism and the good life.

Martin unabashedly admires the United States as a place of freedom -- economic, political and personal. His views are a refreshing counterpoint to news reports of European anti-Americanism, such as the anti-Americanism exhibited during the recent Olympic games. He worked in the United States for a time and he tells me his goal is to return someday.

The Power: The Power of the Ego blog is in the way it reflects capitalism and Objectivism in action, and transforms them into concrete, real-life concepts, not vague theories.
Saturday, August 28, 2004
Latino Influence Spreads Throughout U.S.
Latino populations are spreading to the corners of America.

The trend shows that Latino populations are growing in metro regions not traditionally seen as big Latino population centers, according to a Media Audit survey (found via Hispanic Trending).

Latinos are no longer found just in the traditional places like Los Angeles, New York and Miami. Increasingly they are settling in places like Denver, Atlanta and Philadelphia. There are now 28 cities in the U.S. with more than 100,000 Latinos.

As Latinos disperse more widely throughout America, look for the American business landscape to refresh and re-shape itself continually, including the small and midsize business market. Here are just a few ways:
  • Companies selling to small businesses will be dealing with Hispanic-owned and operated businesses more frequently, even in relatively remote areas of the Midwest and Northeast. Successfully reaching these businesses may require more nuanced sales and marketing approaches than the seller is used to in such locales.

  • Multicultural employees are an advantage. Hiring practices should -- and will -- evolve in a landscape that increasingly includes Hispanic-owned businesses and Latino consumers.

  • Small and midsize businesses that sell to consumers may find that their local market demographics are shifting faster than they realize. Companies that are used to advertising on the local country music station might want to try the fledgling Spanish-language station, too. Don't have a Spanish-language radio station in your part of America? You will soon.

One of the great things about America is its near-inexhaustible capacity to keep absorbing immigrants from many cultures. The fact that Latinos are moving outward from a few large metropolitan areas into the far reaches of the country is a perfect example.
Friday, August 27, 2004
What Does Small Business Care About?
With a little more than two months to go before the U.S. Presidential election, what are the biggest issues for small business?

If you ask blog users, the subject of taxes gets more attention than offshoring or health care when they talk about small business.

To see what I mean, check out the Trend chart below from BlogPulse (create your own). The Trend chart compares the number of references in the blogs to taxes (in green), health (in yellow), and offshoring (in blue), in connection with small business (accurate as of the date of this post):

Thursday, August 26, 2004
Air Travel Revolution To Be Tested
The Small Aircraft Transportation System project (SATS) has passed another milestone. Earlier this month NASA announced that the Federal Aviation Administration and the National Consortium for Aviation Mobility are planning a proof of concept demonstration for June 5-7, 2005 at the Danville Regional Airport in Virginia.

SATS is an attempt to revolutionize commercial air travel in the US. If the project is successful it will distribute commercial air travel to thousands of smaller airports and put people into four- to ten-passenger air taxies. NASA believes:
1. Travel time will be reduced as people access nearby airports.

2. Economic development will be spurred in smaller communities.

3. Air congestion around large cities will be reduced.

4. Safety will be improved.

The current air travel system of hub airports and large commercial airliners has become overtaxed with congestion and has been overtaken by events (September 11, 2001). Many see its continuation as unsupportable. Airline bankruptcies and flight delays they say will worsen and eventually disastrously disrupt the whole system. SATS is an alternative that is beginning to look better as time goes by.

The SATS concept is made possible by the trend toward the development of a new generation of small jets that can be manufactured for less money, are easier to fly, and can be operated more efficiently. If adopted, the system is projected to go into operation in 2015 and to reach full implementation as early as 2020.

SATS has been on the horizon for a while, but has received surprisingly little attention given its potential impact. Calling it revolutionary is putting it mildly. Communication and transportation will be major drivers of business for the foreseeable future. The Internet and low-cost computing have already reinvented communication. Now SATS is promising to make travel to anyplace in the US easier and more affordable. It's estimated that up to 5,000 airports could be incorporated into SATS. Change of this magnitude will open tremendous opportunities for small businesses and the companies that service them.
Wednesday, August 25, 2004
Instant Messaging Use Increases

AOL's second annual instant-messaging trend survey shows that business use of IM is increasing. Approximately 27% of IM users now say they use it at work, compared with 16% in 2003. That means 24 million people in the U.S. use IM at work, mainly to:

  • Communicate internally with colleagues (70%)

  • Get answers and make business decisions (63%)

  • Interact with clients and customers (34%)

  • Avoid potentially difficult in-person conversations (11%)

  • Touch base with children from the office for peace-of-mind (22%)

This survey applies to businesses of all sizes. And while I do not have any statistics to back this up, from my own experience it seems that freelancers, the self-employed and small businesses are big users of IM. Routinely I will be on the phone with a small business owner or employee, and hear the familiar ba-da-loomp sound of an AOL instant message arriving in the background. What about you?
Tuesday, August 24, 2004
Cosmetic Dentistry is the Future
Cosmetic dentistry is growing in a big way... and transforming dental practices in the United States. So writes Shannon Mortland in a Crain's Cleveland Business article(requires subscription).

Elective dental procedures typically account for 20% of a dentist's practice. That number is rising every year.

Dental practices seem to be booming as a result, with some dentists reporting double digit revenue growth each year.

Apparently, reality television shows that make over a person's appearance have something to do with all this. They are causing consumers to be more aware of what's possible today in cosmetic dentistry, fueling the demand for elective procedures.

And while women still account for nearly three-fourths of procedures, men are fast realizing the benefits of cosmetic dentistry.

The growth in cosmetic dentistry mirrors the growth in plastic surgery in the United States. Next thing you know, we'll have a TV series. Instead of "Nip/Tuck" it will be "Drill/Cap."
Monday, August 23, 2004
Multiple Online Payment Types Push Sales
When it comes to closing transactions online, multiple payment choices deliver. According to a Cybersource survey, merchants offering one payment type -- credit cards for example -- convert 60% of people who have started the checkout process. Those offering four types -- credit cards, gift certificates, eChecks, PayPal, etc., close 72% of such sales.

Doug Schwegman, Cybersource director of customer and market intelligence, attributes the success of offering multiple forms of payment to broadening of the Web-consumer base. "...the internet is well beyond the early adopter. We're hitting different demographics now; people who may prefer not to use credit cards and people who don't have them."

Smaller enterprises that conduct business over the Web should take note. The difference between single-source and multiple-source payment alternatives yields 20% more sales. As ecommerce continues to penetrate consumer consciousness, it will change many of the elements of doing business online. Those who recognize and respond to those changes will gain the lion's share of business.
Sunday, August 22, 2004
PowerBlog Review: Small Business CEO

Editor's note: We're extremely pleased to present the twenty-seventh in our popular weekly series of PowerBlog Reviews of other weblogs...

Small Business CEO is an excellent blogging resource designed specifically for CEOs of small businesses. As the title says, the site assists CEOs "in growing their business by providing focused information, resources, services and advice."

The site is run by Steve Rucinski. Steve is a consultant who assists small businesses in developing and implementing growth strategies.

He created the site as a resource for CEOs of the client companies he consults for, and, really, any CEO of a small business.

Not only is the site a service for clients in its own right, but it has an added benefit: it requires Steve and his associates to stay current on issues that clients are likely to face.

As Steve told me, blogging forces Steve and his associates to work harder to find and share resources, advice and information to help their clients. They then take their enhanced understanding and integrate it into their in-person work with CEOs.

Steve says he is still learning how to use blogs effectively as a business tool. But he also believes that his consulting company will only get better at serving clients the longer they blog.

What I like best about this blog is how easily and quickly you can scan it for useful information. A busy CEO with limited time can go to the site, quickly scroll down, and instantly see what is of interest since the last visit.

  • Perhaps one-half of the posts highlight other website resources. Steve presents each of these posts as a simple screenshot of the site along with the URL and a brief description. Nothing could be easier for the eye to scan.

  • The rest of the posts are substantive articles. These focus on the special pressures and issues that CEOs face. As they say, it is lonely at the top, and Steve aims to speak directly to a CEO's special concerns.

The Power: The Power of the Small Business CEO blog is in the way it speaks directly to the CEOs of small businesses, addressing their special concerns and interests. This blog respects the time of CEOs, and is fast and easy for them to use.
Saturday, August 21, 2004
Now is a Good Time to Sell a Small Business
An Inc Magazine article suggests that now is a good time to sell a small business. Sales activity is up, and buyers are plentiful.

Several reasons account for this trend:
  • Private equity firms and venture capital firms raised funds several years ago with capital deployment time limits that are about to run out. They need investments before the time limits expire.

  • The Internet has made it easier to find businesses for sale, even by foreign nationals. Buyers from outside the U.S. are actively seeking American businesses to buy. They find potential acquisition candidates through the Internet, and visit the U.S. to check them out. If the deal works out, they apply for Visas.

  • More out-of-a-job executives are looking for businesses to buy.
And what are some of the other acquisition trends? Smaller sized businesses are being sought out. Instead of requiring US$20 Million in revenue, institutional buyers are considering businesses of US$5 Million. Also, the odds are greater now that a buyer will be a company rather than an individual.

For additional context, see the small business market trend we have identified over at our sister site, TrendTracker: Trend: Small Businesses Change Hands.
Friday, August 20, 2004
Selling Against Wal-Mart
The biggest challenge facing small retail outlets in the U.S. is "competing against Wal-Mart." At least, that's what a colleague said at lunch today.

He recently left a position as head of marketing for a distributor of specialty dry goods and craft supplies for small retailers. In that role he'd spent a large portion of his time identifying which locations had nearby Wal-Mart stores, analyzing and comparing the product lines carried by Wal-Mart, and then determining the product mix most likely to sell successfully.

Offering a larger selection, and carrying unusual or higher quality products, were key ways his retailers competed against the big guys.

Andrea Learned, in her Learned on Women blog, has a piece that echoes this refrain. She points out that Wal-Mart is taking an ever-growing share of the grocery market away from supermarkets. But the Wal-Marts of the world fall down in the area of customer experience. They can't match the warmth, the niche focus, the customer service of smaller local retailers.

-- So while the headlines scream that Wal-Mart is driving small retailers out of business, I think the less obvious -- but equally important -- story is the way Wal-Mart is forcing a change in the nature of small business retailing.

The smart small retailers know they can't beat Wal-Mart at Wal-Mart's game. So they change the game. Increasingly small retailers are becoming niche-focused. They strive to create a memorable, pleasurable experience for the customer. They offer levels of personalized service that the Wal-Marts simply can't match.

Thursday, August 19, 2004
Making the List Doesn't Always Yield More Sales
The New York Times bestseller list does not always mean increased sales. According to Alan Sorensen, an assistant professor of strategic management at the Stanford Graduate School of Business, making the bestseller list had, "no discernible impact on sales," for established authors such as John Grisham. On average, he estimates, appearing on the Times list might increase a book's first-year sales by 13 to 14 percent with the primary benefit going to first-time authors whose sales increase by an impressive 57%.

Sorensen's findings explode some myths about book retailing. It appears that assessments such as the Times list may be better market-analysis tools than volume-building devices.

Bookstores rely heavily on the Times list in determining book placement and pricing. Make the list and your book is likely to be moved to the front of the store and discounted by as much as 40%. While these merchandising efforts probably yield results for new authors, they may just cut into profit margins for the biggest names.

Sorensen questioned conventional bookselling wisdom and found it wanting. The question for retailers in general is whether other long held assumptions upon which they base their merchandising actually work. If the venerable New York Times bestseller list is a paper tiger, what other bedrock merchandising assumptions need to be reexamined?
Wednesday, August 18, 2004
Small Businesses Choose to Stay Out of Court
A recent article in the New York Enterprise Report reports that alternative forms of dispute resolution (mediation and arbitration) are on the rise among small businesses. Steven Davi, a practicing attorney, writes:
The consensus in the business community is that litigation is "too much, too time-consuming, and too expensive." To defend a claim through the entire arc of litigation could take years and thousands of dollars in attorneys' fees and expenses, which you are unlikely to recoup, win or lose. Even when lawsuits are settled out of court, which happens much more often than not, settlements usually occurs only as the trial date approaches and after most of the costs have been incurred.

Although not without its shortcomings, ADR generally promises reduced legal fees, litigation expenses, and diversion of resources. In most cases it also offers speedier resolution; more creative, business-driven solutions that are based on parties' real interests rather than on attorneys' legal posturing; and greater privacy and confidentiality.
I found this article interesting because most of the published studies and surveys --including this one by the American Arbitration Association -- focus on medium and large businesses. That's not surprising. Larger businesses simply have more disputes. Therefore, they use alternative dispute resolution more frequently than smaller businesses.

Yet, smaller businesses have as much to gain -- sometimes more. Small businesses have less financial cushion than large companies to absorb the costs of litigation. Another critical issue among small businesses is what I call the management distraction factor. When a business owner is preoccupied with litigation, it leaves little mindshare for critical business imperatives such as increasing sales or improving the bottom line.

So what does this trend mean? For one thing it opens up new opportunities for attorneys to become mediators and arbitrators. For another, it suggests that attorneys who serve small businesses need to become well versed in how ADR can help their small business clients.
Tuesday, August 17, 2004
Oil Hikes Hit Asia Hard
With oil selling for above US$45 a barrel, experts are expressing concern for the impact on Asian economies.

Ifzal Ali, chief economist of the Manila-based Asian Development Bank predicts the price will stay above US$40 for the remainder of 2004. In an article in the Singapore Business Times, Ali is quoted as saying that high oil prices are now a "serious threat not only to Asia but globally as well."

Oil at US$50 a barrel could reduce China's GDP by 1.1 % and India's by 1.2% he says. Hurt even more would be the countries of Southeast Asia with their heavy dependence on oil imports. The Philippines GDP would drop by 2.6 percent and Thailand's by 3.1 percent.

As the world's economies become more interlocking, a sneeze in Asia can lead to a cold in Europe or the Americas. Smaller enterprises in the west will be affected by what happens in Asia. Companies in the US are outsourcing more and more work to India and other Asian nations. A slowing of economic growth in those markets will have an impact on outsourcing and the price of the goods those developing economies export to western nations. Then there is the question of business investment in Asia. In today's world, to paraphrase John Donne, no nation is an island. Nor is any business, no matter how small.
Monday, August 16, 2004
Immigrants Send Big Bucks Home
Latino immigrants to the United States will send about US$30 billion this year in small amounts to relatives in Latin America and the Caribbean. That is 23% more than the US$23 billion sent in 2001.

This information comes from a survey completed by the Inter-American Development Bank.

The impact of sending money home to family is huge. To put it in perspective, the amount sent back home in 2003 to El Salvador by immigrants constituted over 15% of the entire GDP of that country. The Inter-American Bank says that immigrants' remittances vastly surpass the foreign aid provided by developed nations.

A piece by Ernie Garcia in The Journal.com credits an Inter-American Bank official as saying "the volume of money flowing to Latin America and the Caribbean could transform countries the way Spain and Portugal were lifted from poverty in the 1960s, when millions of citizens from those countries moved to northern Europe to work and send money home."

And what do these immigrants eventually do? According to one immigrant interviewed for the article, he plans to return to the Dominican Republic with his grubstake and start... a small business.

UPDATE August 21: Dragos, over at the excellent Romanian business blog @rgumente, points out here and here that 700,000 Romanians working abroad will send EUR3.2 billion back home in 2004. These amounts constitute approximately 6% of the Romanian GDP of EUR51 billion (US$62 billion using today's exchange rate). I'm sure other countries out there are experiencing similar economic benefit from workers abroad. It's an increasingly global world, isn't it?
Sunday, August 15, 2004
PowerBlog Review: PSFK.com

Editor's note: We're very pleased to present the twenty-sixth in our popular weekly series of PowerBlog Reviews of other weblogs...

PSFK.com is an exciting new blog covering an area near and dear to us: trends. It is a "collaborative trend spotting site run by Piers Fawkes and Simon King with a team of contributors in Europe, the US and Asia."

The PSFK blog has a cosmopolitan feel to it. Maybe it's because the site owners and main contributors bring viewpoints from around the world. Piers Fawkes is in New York and Simon King blogs from London. Other key contributors include Ian McCallam, who is in Madrid and soon to move to Sydney, and Guy Brighton in New York.

They started the site because they were in the habit of sending one another emails with interesting news stories and trends. They simply decided to take it all public in a blog. Each person posting speaks in a different voice and tone, which lends variety and interest.

The site owners are grounded in the design and advertising industries. Piers was a co-founder of New York ad agency, thread. Simon founded the denim brand London Denim.

Their collective eye for sleek trendy design is evident in their choice of content and even the look of the blog.

The site focuses on trends primarily from a consumer perspective. The emphasis is on popular culture and design. But you can also find posts in categories as diverse as advertising, media, luxury, cars, shopping, the Web, and even science.

This is a blog that's easy to scan quickly. It's energetic, upbeat and tends towards the urban hip. Posts are usually brief -- a paragraph or two. Most include a colorful image. They appeal as much emotionally and visually as they do intellectually.

One of the best things about this blog, in my opinion, is how it takes you inside the heads of younger consumers today, and leaves you with no doubt how they see things. It's as insightful about the trendspotters as it is about the trends. (Ad agencies and consumer brand companies, take note.)

A recent post entitled "Viva Brand Dinosaurs!" lambasting brand awards that go to traditional brands, illustrates this:

"Interbrand and Business Week have just released their latest 100 top brands. The list is full of the usual dinosaurs that even your grand father would have been familiar with. Why do brands like IBM, GE, Intel, Amex, Marlboro warrant such approval when there are far more dynamic brands shaping our world around us (versus screaming from a billboard down on us)?? Like the Superbrands awards, given out in Britain recently to antiquarians like Marks & Spencers, Interbrand and Business Week are sending out a message to big business that creativity, innovation and validity should be spurned and reliance on sheer size, distribution and history is key.


...Business Week argues that Cult brands are scaring the established corporations but then they go on to cite Harley Davidson as a classic cult brand. 'Harley Davidson?' PSFK cries. Harley Davidson is the Tyrannosaurus Rex of super brands! Like the baby boomers who ride them, Harley Davidson is a bloated monster shrieking loudly and clinging on to the past it once knew then! Time to award brands on their ability to create real and valuable experiences for their customers, we think."
This is the kind of passion and strong ideas that drives innovation.

The Power: The Power of the PSFK.com blog is in the fresh, iconoclastic, exciting way it looks at the world of design and popular culture. This is a blog that anyone (consumer, ad agency exec, consumer brand owner) can follow to see trends not only spotted, but reflected in the eyes of the trendspotters.
Saturday, August 14, 2004
Family Businesses to Change Hands
The American Family Business Institute survey predicts there will be an unprecedented shift in leadership in family businesses over the next five years.

A large number of family businesses were started in the years following World War II, as GIs returned home and set up shop. Based on the survey, nearly 40% of family business CEOS are expected to retire within five years.

Naturally, most family business owners want to keep the business in the family. Nearly 88% say the business will still be in the family in five years.

But according to an article on family businesses by Andy Birol, the odds are against a family business lasting past the third generation. In fact, he says, less than 20% survive the third generation.

The reasons? Businesses can change radically by the third generation. Markets change, customers change, products and services change. But in a family business, loyalty and tradition tend to keep management from changing itself and its approaches enough to keep the business vibrant and successful.

(Thanks to Steve at Small Business CEO for the tip.)

-- All of which suggests we should expect substantial upheaval in the family business landscape over the next five years. It also sounds like a field day for consultants, accountants and attorneys who advise family businesses. Family businesses are going to need their help.
Friday, August 13, 2004
SMBs Disillusioned with Poor Website Traffic
The biggest challenges that small and midsize businesses (SMBs) have on the Web is (1) low traffic to their websites, and (2) the burden of maintaining their websites and updating content. That's according to Helen Chan, analyst for The Yankee Group research firm, via eChannelLine.

But if you think these challenges dissuade small businesses from setting up websites, think again.

Increasing numbers of SMBs are adopting websites. They're being driven to it by their customers and business partners, who demand a web presence. Between 36 and 60 percent of SMBs with Internet access (varies by size) now have websites.

For web hosting companies, it means there is still opportunity serving the SMB market. Yet, one of the biggest challenges that web hosting companies face is the techno-lingo they use to describe their services, making it tough for SMBs to understand. And, the web hosting companies don't adequately walk SMBs through processes, apparently liking to keep things a big mystery.

Read the whole article. It paints a pretty realistic picture based on my own experience.

On the one side, you have SMBs who need tried and true solutions. They can't afford to take a chance on anything cutting edge. They have limited understanding of technology, yet are being pushed into technology by customer demands and a need to be competitive. And as time goes on they will have a greater need for more sophisticated websites, especially database driven sites.

On the other side, you have Web hosting companies who sometimes are their own worst enemies when it comes to sales. Instead of making their hosting service dirt-simple to attract SMBs, they make it unnecessarily difficult. The hosting companies that figure out how to communicate at the SMBs' level and simplify their service offerings to appeal to busy small businesses will find the most success.
Thursday, August 12, 2004
SOHOs Working Virtually
Jeremy Zawodny, a Yahoo employee, has an interesting description of his workday on his blog:
My work day starts when I wake up and ends when I convince myself to go to bed. Much less of my communication is face to face compared to back then. There's the phone, e-mail, messenger, and so on. But there's a lot of non-work stuff that gets injected in there too. Life and work blend together far more this way. And I see nothing wrong with that except that the burden is on me to keep things in check. But with that burden comes the freedom of more flexible hours, locations, and so on. Few of my meetings are repeating, regularly scheduled affairs. That, of course, helps a bit too.

If someone actually asked me "how many hours a week do you work?" I'd have no idea how to answer.

Welcome to the virtual workplace and, in some ways, the virtual job/life mix.
The post is intended to describe the difference between working in a high tech company versus an old economy corporation. But I'd say his description applies equally well to the work lives of many SOHO (small office, home office) entrepreneurs. For them, life and work are woven together. Their workdays bear little resemblance to a traditional 8-to-5 workday.

For more on this topic, see: Small Businesses Go Virtual.

Wednesday, August 11, 2004
Motorcycle Industry Learns Women Rule
By John Wyckoff

The fact that women control 85% of all the discretionary dollars spent in the US is beginning to wake up retailers everywhere. The last bastion of macho has been the motorcycle industry. They too have seen the shift and are now running at full speed to capitalize on this paradigm shift.

About ten years ago women represented about 3% of the motorcycle owners. This year that number has ramped up to 12% in motorcycles and 16% in ATVs. Who changed? Both the OEMs and dealers have realized that they can no longer ignore this powerful market.

First the OEMs -- Harley-Davidson, the "man's" motorcycle, now produces a Sportster specifically targeting women. The seat height is 24.5 inches, much lower than the 26 to 28 inches of the rest of the big bikes. The Japanese are catching on too by bring out sleek scooters designed to appeal to women and capable of keeping up with Interstate traffic.

Now for the dealers -- Thanks to very intensive training dealers are beginning to understand their salespeople can no longer talk down to women. Some have accepted the idea and have even begun hiring women salespeople. Once only men staffed dealerships, except perhaps for the bookkeeper. Now, although still in the minority, women are showing up as techs, service writers, parts counter, and unit salespeople.

Behavior has changed. Women customers now feel more at ease. Male salespeople have learned to treat women more like intelligent men. Why the switch? Perhaps it's the Internet that allows women to do the research before they enter the dealership. Dealers report that when a woman comes in to buy a bike she sometimes knows more than the man trying to sell her.

The Motorcycle Safety Foundation (MSF) conducts training for new motorcyclists. Last year they reported that 40% of those signing up for the class were women. That's up from single digit percentages a few short years ago.

Car dealers are just beginning to wake up to the fact that they can no longer treat women the way they did just a few years ago. Those who have spent more time developing the women's market have shown greater success than those still in macho mode.

The new pickup trucks show a woman's influence. Pickups are no longer a simple workhorse vehicle. Why the change? Pickup truck makers discovered that women were buying pickups in ever increasing numbers and were insisting on greater comfort and more amenities. The challenge now is to educate the pickup salesmen to the new world of selling to women.

What's the upshot? There are fewer "girly" semi-nude posters in motorcycle, ATV, auto, and truck dealerships. Women's rest rooms are clean. Want to increase your business? If you're in a male dominated market learn to cater to and sell to women. Ignore them and suffer the consequences. In this millennium, women rule.

John Wyckoff is a true guru of the motorcycle industry. A sought-after speaker at motorcycle events and frequent contributor to the motorcycle press, he is the founder of Intersport Fashions West. He is an expert on the motorcycle business and dealerships and is known for having his finger on the pulse of the motorcycling public.
Tuesday, August 10, 2004
CRM on the Cheap
Customer Relationship Management (CRM) systems come with a heavy cost and sometimes disappointing results. Forrester Research says that large companies typically can spend between US$15 and US$30 million a year on complex CRM systems. The Meta Group estimates that 55 to 70 percent of CRM projects fail to meet their objectives.

With numbers like those, smaller businesses are unlikely to invest in CRM. However, the Booz Allen Hamilton website Strategy+Business, offers a common sense approach to CRM. They point to the good old invoice as a respository of much data that can be analyzed and manipulated into a CRM approach. Their suggestion is to pull data from invoices and load it into common database software such as Microsoft Access.

For most smaller companies, this homegrown CRM system is just the ticket. We recognize that it could be labor intensive in the beginning and require disciplined ongoing data collection. But the results could be stunning. And the invoice is just the start. Think what you could do with the information in salespeople's heads and the data acquired by customer service interaction.

If you're selling consulting services to small businesses, think what you could do with a rudimentary customer service system such as the one described by Strategy+Business.
Monday, August 09, 2004
Change as Marketing Opportunity
Confronting Change is the title of an interesting and opinionated article Andrew Carton posted recently on his blog Alteraxion. He talks about the need to see change as "a quest for opportunities" as opposed to responding actively to it as a threat. Carton isn't alone in this view of change. Seth Godin, for one has made a career out of telling people to embrace change and then advising them on how to do it.

Carton's post is a call for all in the business world to wake up to the need to embrace change and seek opportunities. He rails at CEOs and politicians with their "heads buried deep in the sand" as they refuse to see change and opportunity as two sides of the same coin.

There is a lot of talk about change, change agents, evolution, and opportunity in entrepreneurship and small business. It's probably getting to the point where the acceptance of change as a positive can be identified as a trend. Those who sell in the small business marketplace might do well to examine their strategies, tactics, and offerings in the light of change acceptance as a developing trend. They might find that it's an opportunity to pursue.
Sunday, August 08, 2004
PowerBlog Review: Small Biz Advisor

Editor's note: This is the twenty-fifth in our popular weekly series of PowerBlog Reviews of other weblogs...

We can't help but marvel at the number of business blogs that have sprung up in the past 6 months. Savvy entrepreneurs and business people are catching on to blogs' promise and potential.

What's interesting to watch is how each of the blogs in this space is carving out its own particular niche, or unique approach. We appreciate each blog for what it brings to the table.

The Small Biz Advisor weblog is one of the blogs that is carving out its own space. It bills itself as a free online resource for small business owners. Its mission is "to teach our members how to start, grow, and manage their small businesses better." It brings its readers news and editorial updates.

The blog is run by Joseph R. Jones of Seattle, Washington, USA.

It offers original articles, especially advice and "how-tos."

For instance, a recent series of articles appearing on the site were written by the author's wife. The articles are notable because they are written from the perspective of the spouse of a small business owner. They're written in an easy style. The articles capture the essence of how a small business impacts the owner's entire family. She writes:

You've finally made the decision to start a small business. You're checking off all the boxes: business licenses, logos and letterheads, accountants and attorneys. But there's one glaring omission from your "to do" list - your spouse. Yes, you and your spouse discussed the small business idea. Yes, together you weighed the risks versus the rewards. You both agreed to go for it. Now, you need to discuss what "going for it" means to your lives and your marriage, because your spouse will quickly discover that you just brought the office home with you permanently.
This site has posts starting from February of 2004. The weblog is a section of the broader Small Biz Advisor site, and is well integrated into the overall site.

The Power: The Power of the Small Biz Advisor weblog is in its advice and how-to's for small business owners, written in an easy-to-read, fresh, first-person perspective. Ad added touch is having articles written from the spouse's perspective.
Corn, Politics and Competing Against Wal-Mart
In the United States this week we saw the war of the corn photos. First it was presidential candidate John Kerry photographed with ears of corn, then it was President George Bush.

And the reason for all this agricultural focus? The New York Daily News calls it:
Thanks to the knife-edge balance in the Electoral College, the only voters who really matter are in places like Wisconsin, Ohio and Florida.

And it's the rural voters in those states who will likely decide which way the race goes.
Now for those readers who wonder what these rural voters are like and what's important to them, perhaps this post will give you a little inkling.

All of which brings me to my latest subject, produce auctions. Here's the interesting paradox: even in this day and age of giant agribusiness and national grocery store chains, small local produce auctions are on the rise in the United States.

The first produce auction was started in the United States only 18 years ago. Now there are 45 scattered across the US.

These produce auctions fill an important niche. They help smaller produce growers find markets and help smaller grocery stores compete against the huge grocery chains. This article in Farm and Dairy Online by reporter Kristy Hebert summarizes it:
Many small and medium-sized growers aren't big enough to sell wholesale to Wal-Mart or Kroger. But they also don't want to be tied to selling only at a roadside stand.

Produce auctions are the middle ground. Here, wholesale buyers are usually local groceries, restaurants, city farm markets, and even temporary roadside stands...."
There's also an important Amish connection. The Amish are a bigger part of the US economy than is often realized -- and not just for tourism. For instance, in the state of Ohio (which has one of the largest Amish populations in the world, if not THE largest) all the produce auctions are owned and run by the Amish. Not only do the auctions provide a market outlet for Amish farmers, but they serve as new business ventures for the Amish.

Produce auctions are another example of how small and medium businesses compete against the big guys, through identifying and dominating niche markets. For an example of a small local grocery chain that benefits from a local produce auction, see the store newsletter from my local grocery store, located in the heart of black buggy country.
Saturday, August 07, 2004
Cotton Candy Out, Sushi In
The Wall Street Journal (requires subscription) brings us this latest trend report: fairs in the United States are going for unusual foods at the concession stands. Ethnic foods, especially, are hot sellers.

Mexican food, Middle Eastern lamb kabobs, sushi, Argentinean empanadas -- these are just a few of the foods being served at state and county fairs in such traditional locales as the American Midwest and the South.

What's driving this mini-globalization trend? Changing consumer tastes -- and the increasing minority populations in many states.
For the $700 million North American fair industry, the new smorgasbord is partly a response to healthier diets and evolving tastes. But it also reflects shifting demographics. The number of Asian and Pacific Islanders in Iowa, for example, has grown by 28% since 1990, primarily driven by an increase in Vietnamese residents. The Ohio State Fair's new "Fiesta Ohio," a celebration of Mexican heritage, is an effort to reach that state's fastest-growing minority group.
And here you thought being a concession owner at a country fair meant serving fried Twinkies and pickles-on-a-stick.
Friday, August 06, 2004
Home Offices Exploding
One-third of the U.S. workforce -- 44 million Americans -- will work at home at least part-time during 2004.

This astonishing figure comes from a new report out by In-Stat/MDR, which also notes that:
..."soft" factors, such as the desire to stay closer to family, avoid the stress of the office, and cut back on commuting time, coupled with the need to extend the work day (due in part to downsizing), have translated to increased interest in telecommuting among employees -- as well as businesses.
The report goes on to predict that by 2008 this number will rise to 51 million, of which approximately 14 million will work from home full-time.

A portion of these home workers are self-employed entrepreneurs or run small businesses out of their homes. Others are corporate employees who work from home.

This trend bodes large for businesses that provide products and services for home workers, including broadband, home office furniture, telecommunications equipment, package delivery services, and computers -- to name just a few.

Thursday, August 05, 2004
China's Middle Class Means Business
China's growing middle class, especially in its southern province of Guangdong, is spurring the growth of small businesses there.

The businesses are being started mainly by entrepreneurs from Hong Kong, and some from Macao. There is less competition than in Hong Kong or Macao. Less startup capital is needed.

The rise of China's middle class is creating more purchasing power and greater demand for goods and services. Most of these startups are retail outlets, feeding the consumer demand. A China Daily report quotes a University of Hong Kong professor commenting on the middle class's rise:
...living standards in the delta region were now comparable to Hong Kong's in the 1980s. "At that time, so many of us in Hong Kong would like to travel, to buy vehicles and so on. Isn't this being repeated in the delta region?" Yeh said.

China's growing middle class consumers are going to be a powerful force driving the world economy going forward. This is just the beginning.
Wednesday, August 04, 2004
SCORE Gets Hip
Think SCORE (Service Corps of Retired Executives) and what comes to mind? Come on. I know what you are thinking: "a bunch of gray-haired, retired, white men, out of touch with today's small businesses."

But that doesn't necessarily describe the SCORE of today -- and certainly not the SCORE of the future.

Ken Yancey, the executive director of SCORE, is out to make SCORE better reflect the entrepreneurs it serves. An interview in Diversity Inc Magazine notes that Yancey:
...is leading a push to bring more people of color and women into the organization's volunteer ranks. The reason? He wants the volunteers to reflect the demographics of those budding business owners SCORE assists.

"Right now, we are an older white male organization. We want to change the face of SCORE," says Yancey of the 40-year old Washington, D.C.-based volunteer group.
Today women and people of color make up about 20% of SCORE's counselors. The goal is 25%. SCORE believes that if its counselor base better reflects the entrepreneurs it advises, it will be much more effective.

The change started at the top. SCORE's board once was comprised of white men with an average age of 70 -- yes you read that right. Now the 16-member board includes 5 white women, one Asian-American woman, one Latino and two African-American men. The board's average age is now 50.

Sorry there's no link, as the piece appears only in the June/July 2004 print edition of Diversity Inc.

For our non-American readers, SCORE is a volunteer organization of counselors for small businesses and startups. Over 6 million Americans have received small business counseling from SCORE volunteers. SCORE is an excellent role model for leveraging the brainpower of the private sector to encourage entrepreneurship.
Tuesday, August 03, 2004
Check Out Carnival of the Capitalists
Carnival of the Capitalists is a traveling cyber event that showcases business articles from a variety of excellent blogs. It's a great way for you, the reader, to discover new blogs.

This week's Carnival is at the Business Evolutionist blog. Next week Carnival will be over at PoliBlog.

If you publish a blog and would like to participate, visit the Carnival home page.
Monday, August 02, 2004
You Must be Crazy!
OK, OK, so that's not exactly the title of Barry Moltz's book.

The actual title is You Need to Be A Little Crazy: The Truth about Starting and Growing Your Business.

The book describes the crazy ups and downs and emotional trials of running a business.

Barry is a very funny and smart entrepreneur and writer. As his bio says, "Barry J. Moltz has been running small businesses with a great deal of success and failure for 15 years." He's even been dubbed the Bill Cosby of entrepreneurship, because of his humor. Of course, I like the description on his business card best of all: "passion, courage and a streak of craziness."

So, with that introduction, we are very fortunate to have Barry provide his trend insights today here at Small Business Trends.

We asked Barry to give us some pithy takes on key trends he sees among entrepreneurs and small businesses in the new millennium. Here are the trends Barry Moltz identified:

  • Our 1990's hangover is almost over

    We are finally back to realizing it is better to get customers than money if you are an entrepreneur serious about building a business. We realize we won't get money for our business by writing our ideas on the back of a napkin. We need to dig into our bank accounts and invest our own money first to get real paying customers that are not our relatives. Thick business plans and excellent products don't always mean a financially successful business. Think marketing. Think sales and distribution. Just because you build it, does not mean people will come! If you solve a real problem, people will pay you for it. But beware, consumer paradigm shifts take forever.

  • We are downsizing our dreams

    More of us are lowering the personal financial expectations of our businesses. We realize that we do not need to build and run publicly traded companies. Few of us should be Michael Dell or Bill Gates and that is fine with them. We know there is nothing wrong with choosing a lifestyle business that generates several million dollars in sales. We have stopped trying to keep up with the Joneses or whoever it is we are meeting on the chat boards these days. We just want to build something we are proud of. The key question we face is "Can we merge our personal and business goals into one fulfilling life?"
Strike a chord with you?


Thanks to Barry Moltz for sharing his trend insights today. He can be found at www.barrymoltz.com. We've also added his blog, Barry's Blog, to our blogroll on the left.

Finally, I want to take a moment to mention the seminar Barry is putting on in the fall, Growing Your Business Like Crazy. Last week I was on a large, international conference call with some outstanding bloggers, and the topic of Barry's Crazy Seminar came up. Now, what better recommendation could you ask for than that of the blogging community?
Sunday, August 01, 2004
PowerBlog Review: Business Opportunities Weblog

Editor's note: This is the twenty-fourth in our popular weekly series of PowerBlog Reviews of other weblogs...

One of the most interesting trends in the blogging world today is the explosive growth in business blogs. What's even more interesting is the specialization and niche focus many of the business blogs have adopted.

The Business Opportunities Weblog is a great example of niche specialization. And it is a very creative use of the blog format, as well.

The Business Opportunities Weblog is a "moderated list of legitimate business opportunities for entrepreneurs." This site is no shill for fly-by-night web operators. Rather, the site says it will "only list quality businesses opportunities and will not knowingly promote junk bizops, and will actively take a stand against them."

The Business Opportunities weblog is published by Dane Carlson, from Central California, USA.

The format of the site is simple: business opportunities are highlighted in chronological blog entries. In addition to business opportunities, there are occasional news links and other topics of interest to small business owners and entrepreneurs.

This is a very large site. It has over 2200 articles, going back to 2001.

One of the things I like best about this blog is the way it is regularly updated with good, useful, interesting content that is not covered anywhere else in other business blogs. For instance, one recent post noted the perfect businesses for stay-at-home Moms, acknowledging in the process the large number of stay-at-home Moms there are. Another post reviews a franchise opportunity called 1-800-DRYCARPET.

All the business opportunities that Dane covers are presented as straightforward and factually as possible. No hype. No sales pitches. Just information.

A while back I asked Dane if he receives compensation for reviewing individual business opportunities, and he says he does not. Given the fact that we are all bombarded with marketing at most of the Internet sites we visit, Dane's low-key informational approach is refreshing.

The Power: The Power of the Business Opportunities weblog is in its use of the blog format to highlight small business opportunities -- and in its straightforward, factual coverage of specific opportunities.

More news... more trends... more insight...

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