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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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Friday, December 31, 2004
Taking a Small Business Global
Now is a better time than ever for American small businesses to export their products and services. The explosion in low cost communication technology, the growth in online business, and the weak American dollar all combine to make conditions right.

To learn more, head on over to SMB Trendwire to listen to the recorded Conversation with small business expert, Laurel Delaney.

She talks about the nuts and bolts of exporting. And she does it in blunt, down-to-earth style.

Laurel is the CEO of GlobeTrade, with 20 years experience helping U.S. small businesses get started exporting.

I interviewed Laurel and couldn't believe how much detail she packed into a 45-minute recording. You'll find out that a business can be pretty small and still go global successfully. You'll learn that with the Internet and services such as PayPal, even a solo entrepreneur can export services such as Web design. You'll also discover when a small business should NOT consider exporting.

What are you waiting for? Check it out.
Thursday, December 30, 2004
More Top Trends for 2005
Kiplinger Forecasts (requires subscription) has just issued its Top Ten Trends for 2005. These trends are applicable to the U.S. economy as a whole, and not necessarily just small business:

    1. Higher energy prices - Kiplinger says look for higher gasoline prices by Memorial Day, with prices averaging US$2.15 per gallon.

    2. Modest (3.5%) economic growth - Economic growth will be slower than in 2004, but hiring will accelerate.

    3. A worsening situation in Iraq The attacks will continue and get worse.

    4. A bottom for the dollar by spring The weak U.S. dollar will finally hit bottom in the spring and begin to edge upward.

    5. Higher prices, but lower inflation - Inflation will be 2½%, lower than 2004. Prices will rise due to the weak dollar increasing the price of imports.

    6. Better stock returns than 2004 - Expect 12%-15% stock returns. Likely strong performers include: Energy, defense and biotechnology plus manufacturers of medical and electrical equipment.

    7. An even more contentious U.S. political arena - Due to contention, we are not likely to see tax reform or Social Security reform in 2005. But we may get some liability lawsuit limits and bankruptcy law reform.

    8. Employer health costs rising about 10% - Health insurance premiums will rise 10%, which sounds like a lot but is not as bad as some recent years. Health Savings Accounts, high-deductible plans, and consumer-driven plans that emphasize judicous use of health care, will be the main techniques used to control costs.

    9. Burgeoning foreign investment BY China - Chinese companies will be snapping up foreign companies. Top targets include electronics, IT, telecom, and raw materials for China's builders and manufacturers.

    10. Intense competition for telephone and Internet services - Everything in this category will be getting cheaper. We'll see many new services and new technologies rolled out.
The issue gripping small business the most is number 8, health insurance costs. The U.S. system of employers providing health insurance benefits for their employees, places small businesses at a disadvantage.

Editor's Note: This is the eighth in our series of articles on 2005 trends predictions. We are comparing and contrasting trends predictions from different sources that will impact the small business market in 2005 and beyond. Here is our running list of trend prediction posts:
Anti-Trending and Other Trends for 2005
Entrepreneur's Top Trends for 2005
Small Business is Itself a Trend
Top Technology Trends for 2005
Top Global Consumer Trends
Inc.'s Trends for Entrepreneurs in 2005
Top Travel Trends for 2005

Wednesday, December 29, 2004
Top Travel Trends for 2005
Quite a few small businesses are involved in tourism or depend on travel for significant revenues. Think bed-and-breakfasts, small wineries, franchisee motels, tour guides, rental condos, bus and charter jet companies, restaurants, boat charters, taxi services, and so on.

So we thought it would be useful to review the top 5 trends in travel for 2005. This article by the Mercury News outlines them:

  • Togethering - This trend is about people taking vacations together or going on trips in groups.
    "There's definitely a trend toward people wanting to travel with the entire family, including Grandma and Grandpa," said Chris McGinnis, travel adviser for CNN Headline News. "You see that in multiple-room bookings on cruises, or people renting a villa in Europe instead of a hotel room. People want to have experiences with their families; that's what travel is all about now."
  • Mediterranean cruises - Americans are beginning to go back to Europe for travel. But with the weak American dollar, they are opting for cruises because the prices are fixed. Cruises are a good value for European travel during these times.

  • Short trips -travelers are taking shorter trips. As the article notes, we dare not imagine what our email boxes would look like after a two-week trip (I can commiserate). The thought of coming back after a long weekend is more bearable.

  • Edutravel - People are going to places where they can also learn something -- whether about the local history, or fine cuisine.

  • Big U.S. cities - Big cities are drawing interest as travel destinations. New York, Philadelphia, Chicago, Atlanta -- all are popular destinations for 2005. New York, especially, has made a complete turnaround from its post September 11 slump.

  • Editor's Note: This is the seventh in our series of articles on 2005 trends predictions. We are comparing and contrasting trends predictions from different sources that will impact the small business market in 2005 and beyond. Here is our running list of trend prediction posts:
    Anti-Trending and Other Trends for 2005
    Entrepreneur's Top Trends for 2005
    Small Business is Itself a Trend
    Top Technology Trends for 2005
    Top Global Consumer Trends
    Inc.'s Trends for Entrepreneurs in 2005

    Tuesday, December 28, 2004
    Inc.'s Trends for Entrepreneurs in 2005
    We continue our survey of trends predictions with a look at Inc. magazine's top five trends defining 2005. For our non-U.S. readers, please note that this list is very much a U.-S.-centric list:

    • High prices on raw materials - The price of steel is up 46%. Lumber is up 25%. And cement is just plain hard to find.

      What's the problem? A construction boom in Asia is driving up the price of raw building materials.

      Builders and manufacturers will pass on higher costs to their customers if they can. If they can't -- because of government contracts or other price guarantees -- they'll look to join associations for joint buying power.

    • Logistical problems resulting in long lead times - Just-in-time delivery is being sorely tested by the limits of a stretched global distribution network.
      "If you're waiting for anything offshore, the ships in Long Beach are so backed up you can walk to China on them," says Jack Stack of SRC Holdings, a manufacturer in Springfield, Mo.
      Look for more capital and inventory to be tied up in warehouses. Small businesses, check your credit lines! You may need the liquidity.

    • Benefits driving up labor costs - Double-digit increases in health insurance premiums are, unfortunately, a given these days. Providing health insurance for employees despite the high premiums will be a challenge.

      Another challenge will involve reworking benefits plans for the sandwich generation (those caring for children and aging parents). This will heat up as the baby boom generation reaches its golden years.

    • Struggling state economies - Cuts in state budgets have shifted the burden of worker training and other programs on businesses.

      Florida, home to a large number of entrepreneurs, is still recovering from the multiple hurricanes of 2004. In California, with its large concentration of entrepreneurs, Governor Schwarzenegger is engaged in reforming laws such as workers compensation.
      "The jury is still out," says Jack Kyser, of the Los Angeles County Economic Development Corp., "but the small-business community feels that they have a friend in Sacramento."
    • The return of early-stage deals - Venture capital investments are likely to increase in 2005. Businesses in Silicon Valley and Boston will have the edge (no news there!). The money will be doled out in smaller deals and businesses will have to prove themselves before getting more.
    Editor's Note: This is the sixth in our series of articles on 2005 trends predictions. We are comparing and contrasting trends predictions from different sources that will impact the small business market in 2005 and beyond. Here is our running list of trend prediction posts:
    Anti-Trending and Other Trends for 2005
    Entrepreneur's Top Trends for 2005
    Small Business is Itself a Trend
    Top Technology Trends for 2005
    Top Global Consumer Trends

    Monday, December 27, 2004
    Top Global Consumer Trends
    "MEN are becoming more like women, children want to be teenagers, and we are all spending more time in our homes - these are three of the ten 'mega-trends' that are shaping the future of our consumer society."

    This quote is from the Scotsman, writing about the top 10 consumer trends that will shape 2005. The article is written from the perspective of the United Kingdom. It cites the extensive "Global Consumer Trends" report from research firm Datamonitor.

    What are the top 10 global consumer trends according to Datamonitor?
    • Age Complexity

      Children are acting and thinking older. Anyone with children knows kids seem more mature, with pre-teens behaving like teenagers. And adults are acting more like kids (you knew that, too, right?). What it means for business is that you will have to appeal to teen attributes for kids, and bring out the youngster in all us adults.

    • Gender Complexity

      Metrosexuality is in -- men are behaving more like women, and women are behaving more like men. Well, that's true if you follow traditional views of behavioral distinctions between men and women. Here is the observation of the Scotsman article: "Women have moved into many traditionally "male" employment areas and are earning more. There are also more women entering tertiary education, and they are marrying later or staying single. Women's drinking habits have radically changed too. *** At the same time, men are becoming more feminised as they take an active role in parenting, become more fashion-oriented and develop beauty regimes, including opting for plastic surgery."

    • Lifestage Complexity

      Is the nuclear family (father, mother and children) slowly going the way of the dinosaur? The report cites significant family changes. More people live alone, do not get married, or do not have children at all.

    • Income Complexity

      High income groups are spending on "anti-luxury" (i.e., shopping for discounts), while lower income groups splurging on luxury items. Look for discount shopping outlets to grow, at the same time premium goods and services also grow.

    • Individualism

      Individualism has always been somewhat an American trait, but now it is a trend becoming more marked in Europe, Latin America and Asia -- even the Middle East. What that means for marketers, retailers and consumer goods manufacturers is that brands will have to speak clearly to their targets. Products must have any number of flavors, styles, colors and variations to suit individual tastes.

    • Homing

      Faith Popcorn made this concept famous with coining the term "cocooning." Consumers are spending more time at home. In turn this leads to growth in businesses catering to consumers at home, including home entertainment (think cable TV and DVD sales), as well as restaurant-quality food and beverages for home. Datamonitor also reports that globally a greater number and variety of workers will work from home.

    • Connectivity

      Technology (instant message, mobile phones and email) are keeping us all connected. People also have an increased desire for belonging to the greater community. Even manufacturers have gotten into the act, with products that encourage breaking the ice, such as Molson Twin Label beer bottle labels that get people talking to one another.

    • Sensory Experiences

      People are seeking out more intense experiences. Extreme sports, long action-packed weekends, aromatherapy, authentic ethnic foods, even intense flavors of soft drinks -- all play to our needs for sensations and sensory experiences.

    • Convenience

      People are eating on the go, frequenting convenience stores, and buying products that offer greater convenience. Look for self-heating cans and fast-chilling drinks.

    • Health

      Health and well-being is much more at the forefront of people's minds, with sales of healthy, de-stressing and self-medicating products booming. Products that cross over trends -- for instance, combining health with convenience -- will also be big. Convenience foods that are perceived as healthy are one example.
    Editor's Note: This is the fifth in our series of articles on 2005 trends predictions. We are comparing and contrasting trends predictions from different sources, to give you a well-rounded view of trends to anticipate and capitalize on, in the small business market. Here is our running list of trend prediction posts:
    Anti-Trending and Other Trends for 2005
    Entrepreneur's Top Trends for 2005
    Small Business is Itself a Trend
    Top Technology Trends for 2005

    Sunday, December 26, 2004
    PowerBlog Review: Next Level Biz Tips

    Editor's note: We are pleased to present the forty-fifth in our regular weekly series of PowerBlog Reviews of business weblogs.

    At this time of year we spend considerable time reviewing trends predictions. So it is fitting that we review Next Level Biz Tips.

    Next Level Biz Tips is a study in using a blog as the sole Web presence of an independent professional (consultant), Denise Wakeman.

    This blog is a good example of where we predict blogs will evolve to for consultants and other independent professionals.

    We can expect to see more consultants in the future, especially in the United States. The U.S. Bureau of Labor Statistics predicts that consulting services will be the second fastest growing industry over the next decade.

    And what is the Web tool of choice for consultants? A few years ago it was a Website with an email newsletter. Today it's a blog and RSS feeds.

    Denise is a marketing systems professional who in the past has used database marketing to deliver tips to clients. Now she is moving toward using the blog as her sole Web presence. She says: "I think it's the ideal way for independents to create a simple yet powerful web presence for low cost and a tiny learning curve."

    Another reason that consultants like Denise are embracing blogs so quickly is to respond to client needs.

    Denise says it was one of her clients, "Patsi Krakoff of http://www.coachezines.com who got me going with blogs. *** When Patsi told me she wanted to start a blog, I knew I better jump in and learn the ins and outs of this medium fast, since I knew she may be coming to me with questions. That is in fact what has happened and now I'm assisting other clients with setting up their own blogs."

    This is not a blog about blogging. It's about informing independent professionals about the wide variety of Web resources available to them.

    I especially like the way Denise uses an interesting artifice in the form of tips labeled "Next Level Tips." They're single topic tips on a broad assortment of Web marketing topics.

    The Power: The Power of Next Level Biz Tips is in the way it signals how important a tool the blog has become for consultants. Not only that, but many professionals will need to become expert at blogs in order to meet the needs of their blogging clients.

    Saturday, December 25, 2004
    Peace on Earth
    Merry Christmas to all Small Business Trends readers, and thanks for your support and kind words throughout the year. You've made all the difference.

    And a special greeting to the large contingent of readers from non-English language countries. Even though I can write only in English (trust me, you wouldn't want to read my pigeon Spanish or Italian), please let me extend a holiday greeting to those of you from other countries -- at least the countries that I know of:

    Feliz Navidad; Buon Natale; Froehliche Weihnachten; God Jul; Boas Festas; Craciun Fericit; Joyeux Noel; Nollaig Shona Dhuit; Mele Kalikimaka; Nadolig LLawen; Kung His Hsin Nien; Glaedelig Jul; Kung Ho Hsin His; Vrolijk Kerstfeest; Pozdravlyau s prazdnikom Rozhdestva!

    (Languages respectively: Spanish, Italian, German, Swedish/Norwegian, Brazilian Portuguese, Romanian, French, Irish Gaelic, Hawaiian, Welsh, Mandarin Chinese, Danish, Hong Kong Chinese, Dutch, Russian.)

    And to all our readers who do not celebrate Christian holidays, we extend a warm winter greeting:

    Shalom; Namaste; Joyous Kwanzaa; Salaam; Pleasant Winter Solstice. And yes, even to you Seinfeld fans, Happy Festivus.

    Peace on Earth, Goodwill to All

    Thursday, December 23, 2004
    Top Technology Trends for 2005
    Red Herring magazine published its list of top technology trends for the coming year, noting:
    "Laying out technology trends is a treacherous undertaking. Those predictions can end up haunting the luminaries who pronounced them after they've proven to be ridiculous."
    Well, we say sometimes you have to take a risk. So bully for you, Red Herring, for going out on a limb.

    The list is highly technical (it is about technology, after all), so we'll highlight only those most relevant to small business:

    • The Death of Distance - "Telecommuters and remote workers are closing in. Recent improvements to enterprise voice-over-IP (VoIP) are promising to make the concept of location irrelevant." The article points out that users of enterprise VoIP are finding out the cool things that can be done with it, not just the cost savings. Those cool things -- such as integrating with Microsoft Outlook -- will help make distance among workers irrelevant.

    • Desktop Search Heats Up - The amount of data that users store on their desktop computers is exploding. A whole new industry has popped up to enable users to search their desktop files easily, including Google's desktop search tool, and startup Blinkx.

    • Rise in Web Services - The ability to transmit data on the Web and make it really useful, go the heart of Web services. By the end of 2005, 45% of companies will use Web services. Even bloggers: "Protocols like Really Simple Syndication (RSS) and Atom have caught on among bloggers, allowing them to make their content available to anyone to pour into their own web pages. By the end of 2006, most vendors of web publishing software will incorporate support for RSS in their products, according to Gartner."

    • Home Sweet Digital Home - Red Herring says that the digital home -- with interconnected devices all around us -- is finally becoming a reality. Computers and entertainment products are converging, to bring unprecendented amounts of entertainment and digital content to us in our living rooms. "The ultimate winners will be companies that adopt Internet-based platforms, open standards, and customer-friendly products, which could most likely mean startups with new ideas and innovative technologies."
    Read the full list to see where technology is headed in 2005.

    Editor's Note: Throughout the next week we will be reviewing trends predictions. We'll keep a running list of all the trends posts in our series, starting with our interview of futurist Watts Wacker last week:
    Anti-Trending and Other Trends for 2005
    Entrepreneur's Top Trends for 2005
    Small Business is Itself a Trend
    Wednesday, December 22, 2004
    Small Business Is Itself a Trend
    The Nextpert News Network has come out with its list of mega-trends for 2005. In keeping with most of these trends lists, you'll find it limited mostly to consumer-culture. It's also a very long list, so we won't try to summarize it all here.

    But one of the mega-trends on the list is worthy of pointing out because it is so on point to our mission here at Small Business Trends. Nextpert says that the rise in "small business" is itself a trend for 2005:
    SMALL BUSINESS - and SMALL BUSINESS BOOMERS - we mentioned this strength among sectors of small business several years ago including work-at-home moms and Mr. Moms; family, weekend and eBay businesses; and Baby Boomers starting new careers on their own as their corporate and industrial lives ebbed and they didn't want to or couldn't retire. The President's open support of small business didn't hurt on November 2. Look for continued growth and more recognition - TV shows even a TV network - and major opportunities for brilliant ideas on how small businesses can create networks to help each other (like co-ops and referral systems) how small businesses can be perfect outsourcers for budget-conscious giants and new ingenious and needed ideas that will develop into big franchises of small players.
    Editor's Note: Throughout the next week we will be reviewing trends predictions. We'll keep a running list of all the trends posts in our series, starting with our interview of futurist Watts Wacker last week:
    Anti-Trending and Other Trends for 2005
    Entrepreneur's Top Trends for 2005
    Tuesday, December 21, 2004
    Entrepreneur's Top Trends for 2005
    At this time of year we like to take a look around and survey the trends lists for the coming year.

    They provide great ideas for small businesses and entrepreneurs about possible new businesses or products.

    Trends inventories also are useful to any company selling to small businesses, helping them understand their small business customers better.

    Entrepreneur magazine offers its list of top 8 trends for 2005, compiled by writer Laura Tiffany. It's very much a U.S. retail, consumer-culture oriented list, and in that sense is fairly limited, but still useful:
    • Authenticity - Authenticity has to rank right up there right underneath "blog" as word of the year, in my opinion. In fact, authenticity is one of the hallmarks of blogs. So it's no wonder this made the list of trends. It seems to have a lot of application in marketing. As writer Laura Tiffany notes in the article: "How can a company tout its authenticity? You can make like Apple Computer, Levi Strauss & Co. and Mercedes-Benz and use real customers in your ads. Brag about your use of local ingredients and materials, traditional and artisanal methods, or environmentally and socially responsible practices."

    • Age 35 - Entrepreneur's article suggests that 35 is becoming the golden median age in the United States for marketing. The article suggests that aging baby boomers don't want to give up this age, and younger people see themselves as more mature and aspire to age 35. So if you are looking at the prime age to target, it may no longer be that 18 to 20-something male, but rather the 35 year old wannabe.

    • Multitasking and Memory Loss - Are we trying to do so many things at once, that we are shorting out our memories? Don't laugh. That's what the article suggests. It goes on to suggest that memory aids will be hot.

    • Obesity -
    • While rising obesity levels are old news, apparently the trail of business niches to serve bigger people is just getting legs. It includes everything from the obvious (plus-size apparel) to the more subtle (plus-size caskets, and higher-capacity scales).

    • The Third Place - People are looking for a third place to get away from home and work (the first and second places). Restaurants, coffee shops and other outlets equipped with WiFi are going out of their way to keep patrons around as long as possible. Sounds like just what we don't need with expanding waistlines -- eateries that never want you to leave....

    • Snobization - "Middle-class Americans are turning into a bunch of snobs," according to the article. It refers to everyday items being turned into chic luxury goods, but not necessarily expensive ones. The take-away for small businesses: see if you can transform your products and services from ordinary to premium.

    • Uniqueness - This trend is all about our desire for cachet...to be considered out of the ordinary. "In a world of big-box retailers, it's up to the entrepreneur to fill this need."

    • Life Caching - Saving and cherishing the moments of our lives is what this trend is all about. Future generations will "hoard memory cards full of blog entries, digital photos and the first websites they ever built."
    Editor's Note: Throughout the next week we will be reviewing trends predictions. We'll keep a running list of the trends predictions articles, starting with our interview of futurist Watts Wacker last week: Anti-Trending and Other Trends for 2005.
    Monday, December 20, 2004
    Carnival of the Capitalists Goes XTreme
    Carnival of the Capitalists, that weekly business event that travels from blog to blog, has now arrived at XTreme for the week of December 20th. Marshall worked till the wee hours of the morning putting together a superb Carnival master post.

    Carnival of the Capitalists showcases business articles from a variety of excellent sites. You can put your finger on the pulse of what people are really thinking. This is stuff you won't find in major media.

    All the entries look intriguing and well worth reading, as usual. My particular favorites this week are:
    Next week, December 27, 2004, Carnival will be over at Dane Carlson's Business Opportunities blog.

    If you would like to submit an article or become a host, visit the Carnival home page for more information. Thanks to Gongol.com, there is now a handy Carnival submission form for submitting entries. It really does speed up the submission process.
    Sunday, December 19, 2004
    PowerBlog Review: BusinessWorks

    Editor's note: We are pleased to present the forty-fourth in our regular weekly series of PowerBlog Reviews of business weblogs.

    Small business weblogs are written primarily to market and promote their businesses, right?

    Not necessarily. BusinessWorks is a different kind of business blog. It's by someone not even in business -- yet.

    BusinessWorks' tagline says it is "a dotcom in making, A Journey from Concept to Wall Street."

    is a study in using a blog as a tool to start up a new business, including researching the market and writing a business plan. Previously we've encountered a few such "case study" blogs. But never before has the owner walked us so precisely through his thinking process for deciding what kind of business to start in the first place.

    BusinessWorks is very much a blog about process and problem solving, not about marketing.

    The brains behind this blog calls himself Businessorati. He is a software developer who works in an Omaha, Nebraska (USA) software company. Obviously the blog is a project he is doing outside of his day job, as his posts are almost always late at night. (Because this is a side gig, we won't publish his real name.)

    Businessorati began thinking about entrepreneurial options when he was facing the prospect of his job being outsourced to India. He looked at buying a business and even buying a franchise. Eventually he got another software development job, but decided to use the entrepreneurial knowledge he had gained to start a blog.

    The startup saga starts in September 2004 when the blog was launched. At first we know he wants to start a technology business but he isn't sure what kind of business. We follow Businessorati as he evaluates three high-potential technology sectors: biotech, nanotech and RFID.

    We follow along day by day as Businessorati engages in what he calls organized brainstorming. We see him evaluate the pros and cons of each technology. He even conducts online market research of sorts, in the form of a poll on the most promising sector in which to start a business.

    After he decides what kind of business to start, we watch him develop his business plan, section by section.

    In many ways, on different levels, BusinessWorks illustrates how blogs can be used for guiding and documenting a "process" in real time, due to their chronological set-up. You can put up a single post on each step of a process, addressing each step in manageable chunks, and move on after each one. It's a user-friendly, highly-readable tool for project management -- unlike the typical spreadsheet.

    BusinessWorks also illustrates how blogs can be used for problem-solving. We readers are like flies on the wall, watching the writer's thinking processes. We watch as he wrestles with each problem or issue. He even engages his readers in helping solve his essential business challenges, a revealing move that involves teamwork and joint learning.

    Businessorati seems to have really enjoyed writing his blog. And he is very committed to pure blogging. I asked him where he sees the future of blogs and he replied, "Blogs will be a very powerful medium in future as long as big companies don't pay the bloggers to sell their products or services. Basically free spirit of bloggers should not be bought out. If this happens, it will be very difficult for sincere bloggers to voice their opinions about a product or service without being compared to other bought out bloggers."

    The Power: The Power of BusinessWorks is in the way it uses the blog format as an integral part of a process, to solve a business problem.

    Not all small business blogs can or should be about marketing. They can be productivity tools... ways to organize internal activity and intellectual capital. By using the blog format in these capacities, BusinessWorks shows us how to harness the variable power of the blog.

    Saturday, December 18, 2004
    SMBs Use Mac Computers
    Jupiter Research's Microsoft Monitor blog takes Microsoft to task for restricting access to its support sites to those using Internet Explorer. Apparently the site blocks out anyone using Firefox browser or a Mac.

    In the process, researcher Joe Wilcox speaks about software usage by small and medium businesses:
    A recent JupiterResearch survey found a surprisingly large number of small and medium businesses running a Mac productivity suite (I plan to publish the numbers later, so I won't reveal them now). Seeing as how Microsoft sells the only full-featured, native-Mac OS X productivity suite, its a fair bet the majority of these customers are Microsoft's. But they can't easily access Microsoft's small business site.

    This wouldn't be the first time a Microsoft Website locked out other Web browsers. And I can understand why Microsoft wants to hook SMBs as tightly as possible into its technologies. There is some legitimate benefit to integration, particularly among SMBs, where three quarters don't have a full-time IT manager. Additionally, if Microsoft can lock SMBs in early, they will continue to buy the company's products as they expand. As explained in my report, SMB Market: Microsoft's Early Success Shows Way for Savvy Partners and Competitors," not a lot of smaller businesses have the kind of server software that would be a checklist item for enterprises. Upsell potential is huge for vendors with the right entry strategy.
    This link came via Susan Bradley of the E-Bitz blog. As Susan notes in a post, consultants and integrators who work with Microsoft products at clients' locations, have recognized for a while that some of their small business clients are using Macs.
    Thursday, December 16, 2004
    Anti-Trending and Other Trends for 2005

    Watts Wacker, FuturistWant to know the trends that will be hot in 2005? Watts Wacker, the renowned futurist, recently spent some time with me in a telephone interview.

    Here is what Watts says we should expect to see heat up in 2005 and beyond. Enterprising small businesses -- and those that sell to small businesses -- may just find new opportunities from these trends.

    Watts says we can expect to see four macro-level trends that affect society in general and businesses of all sizes:

    1. Rise of the Gray Hairs: One of the greatest demographic shifts in the United States ever will happen in 2005. Every single Baby Boomer will be 40 or over. He is one himself and as he points out, Baby Boomers tend to think they are the arbiters of taste and style. While that's not necessarily true, the aging Baby Boom generation is a significant force.

    2. Premium is In:
    There is a continued move toward premium-ness. People are trading up from standard level. Think of Honda cars with heated seats. Or premium cookies.

    3. Trend of "Anti-trending": Companies will leverage their greatest strengths, even in contrarian ways. Hardee's new 1400 calorie hamburger is an example. Just as Wendy's, McDonald's and other fast food restaurants are seeing that fat could be the next tobacco in litigation, at same time they are offering 1400 calorie hamburgers.

    4. Lock it Up: We will see more emphasis on safety and security. Keeping things safe will be at the top of people's minds. This applies to online security as well as security in the physical world, and it applies to everything from services to goods.

    As to trends specific to the small business market, Watts predicts we will see:

    • Accelerated Online Sales: We are going to see an increase in the increase of buying online. Online shopping and technology has moved beyond the early adopters and the mainstream. It is now so well established it is drawing in the laggards. Watts drew an analogy from hearing a cell phone ringing during a church service. He said don't assume it is just a rude person. It is probably someone in his 70's who just purchased a cell phone for the first time who doesn't yet realize what the rest of us have known for some time about cell phone etiquette.

    • Homeopathic Medicine: The recent decision by Merck withdrawing the drug Vioxx has people concerned over whether traditional medicine has been tested properly. People are taking more preventative medicines. Using natural remedies and alternative remedies will gain ground.

    • Low-impact Makes an Impact: Aging Baby Boomers are looking for exercise that is easier on them. A perfect example is low-impact exercise such as Tai Chi and yoga. But not all low impact exercise is Eastern. Low impact includes swimming, spinning, and other exercise not as hard on aging bodies.

    • Image Enhancement: No, not our personal images. Watts sees the cult trend of photoshopping (manipulating images using Photoshop software) going mainstream. He sees a rise in the use of technology to have images appear exactly the way we want them to create a new "reality." For instance, a blended family might eliminate a divorced spouse from a photo -- even add in the new spouse.

    • Technology Convergence: He sees bundling between broadband, wireless and other communications technologies. Voice, wireless, Tivo, messaging -- they all will converge. You'll retrieve cell phone messages through your computer, and computer messages through your cell phone.

    • Return of Loyalty: After years of saying "loyalty is dead" and "consumers are fickle," there are signs that when people find something that works, they stay with it. Expect to see the real power not only of service (i.e., how you provide something) but experience (i.e., how I feel about the result). This bodes well for the small business market -- and Watts suggests small businesses think about customer loyalty strategies. He points to the example of the high-end Dorothy Lane grocery stores, and how they stopped advertising. They took their ad money and developed a loyalty award program: the top 10 shoppers get an all-expenses-paid trip to Hawaii.
    And so what are the most telling trends among these? Watts suggests that the trend of anti-trending is one of the most interesting trends for small retailers and other small businesses to explore.
    Wednesday, December 15, 2004
    Personal Shoppers: A Lifestyle Business
    Mark Henricks writes an interesting column over at Startup Journal called "Lifestyle Entrepreneurs." The focus is on entrepreneurs who start certain businesses, in part because of the enjoyable lifestyle they offer. The careers he covers are varied and pretty interesting.

    His most recent column is about personal shoppers. These are people who love to shop and do it for other people for a fee. They make a decent living and have a lifestyle they love:
    Laurie Ely began a grocery-shopping service for elderly residents of Chicago nine years ago while seeking ways to earn a living while caring for her three young children. The divorcee often helped her mother shop for food and found herself frequently approached by other seniors in the supermarket asking for help reading labels or reaching high shelves.

    She printed a flyer identifying herself as "Laurie the Shopping Lady," offering to do similar chores for pay, and posted it in her neighborhood store. "Esther told Ethel, Ethel told George, George told Myrtle, and tomorrow I'm shopping for 18 elderly people," Ms. Ely says. She fills phone orders three days a week, towing as many as five carts as she shops. She spends more than $100,000 annually at her favorite chain, which qualifies her for discounts.

    She charges a 15% commission on purchases and an $8 fee for each order, which works out to under $20,000 a year. But her services extend beyond shopping -- she often finds herself bringing elderly customers cash as well as changing light bulbs and engaging in conversation -- an equally in-demand service for lonely seniors.

    "I'm the most-appreciated person in the whole wide world," Ms. Ely says. "They always say they don't know what they'd do without me. And I don't know what I'd do without them. If I didn't have this work, I wouldn't be able to live in the home I live in. And I'm done by 3 o'clock so I can go pick up my kids."
    While you're at it, check out the other Lifestyle Entrepreneurs columns. You'll begin to get an inkling as to why the numbers of self-employed continue to grow.

    Tuesday, December 14, 2004
    Guy Kawasaki on Bootstrapping
    The Art of the StartRecently I received a review copy of Guy Kawasaki's The Art of the Start. I've been a big fan of Guy Kawasaki for a while. I've written about his columns and books several times in this site, and I would have purchased this newest book anyway.

    The reason I admire Kawasaki so much is his down-to-earth advice, delivered with wit and bluntness. I don't have time for people pushing fad ideas -- or conceptual fluff. The more buzzwords-du-jour anyone uses, the less confidence they inspire in me.

    So, that said, here is my review of The Art of the Start:

    Read it. The book is worth your time.

    You can pick it up and read sections of it quickly (on a plane or in a doctor's waiting room), put the book down for a few days, and come back to it for another 20 minutes. It's that kind of book. In this day and age when distractions are endless, that's the only kind of book many of us have time to read.

    And don't let Kawasaki's day job as a venture capitalist throw you off.

    Regular readers of Small Business Trends know I am not a big fan of venture money. I've been there, done that. I know that venture capital is available only to a tiny percentage of businesses with high growth business models, and the allure of it is fool's gold to everyone else. In fact, I have spent a lot of time trying to convince entrepreneurs not to go after venture money, but to develop their small business by bootstrapping (i.e., without outside financial help).

    Despite being a venture capitalist, Kawasaki has an entire chapter on bootstrapping a business. That chapter alone is worth the book. Of course, there is a lot of good stuff in the rest of the chapters that bootstrappers can use, too.

    Let me give you a preview of some of what he writes about bootstrapping:
    • Understaff and Outsource. This part was really interesting because Kawasaki admits he made a mistake in hiring too many people during the dotcom boom. Now he says "Do as I say, not as I did." Outsource as many functions as possible. Except don't outsource strategic functions like research and development. Outsource functions like processing payroll, which are not core to your business (unless you happen to be Paychex).

    • Ship, Then Test. What he means is for a startup to get a product out the door and into customer hands as fast as possible. That way the company can start bringing in money and start getting customer feedback. No matter what he talks about, he always comes back to what I call the first rule of startups: cash is king.

    • Build a Bottom-up Forecast. This is some of the best advice you could give an entrepreneur in a startup, but it is advice few people want to hear. Entrepreneurs have so many things to think about that it's tempting to do a broad swag for sales numbers. But unless you take the time to think through where your sales will come from on a weekly, even daily basis, your numbers won't be realistic -- I guarantee it. Kawasaki suggests a formula for how to build a bottom-up forecast, by calculating how many sales a sales rep can actually close in a given day, week, month, year. It's a handy formula -- and great advice.
    I could go on, but for the rest you'll have to read the book.

    And as Guy Kawasaki said when I emailed and asked him for the one piece of advice he would give any bootstrapping entrepreneur over all else: "Double the time you think it will take to ship and divide your sales projection by two -- this is what is most likely to happen."
    Monday, December 13, 2004
    Starting a Media Business
    Join us on Thursday, December 16 at 4:00 PM (East Coast U.S. time) for a Conversation with Eric Olsen, of the popular culture blog Blogcritics.

    Eric will be talking with Steve Rucinski of Small Business CEO, and me, about his experiences building an online media business with over 650 authors. Eric uses a blogging platform (a souped-up version of Movable Type) for his media business. And amazingly, he does it all from his home office.

    Eric has some great stories to tell. They'll make you laugh, they might even make you cry. But they won't be dull.

    No site is quite like the freewheeling Blogcritics -- and no business model is quite like it either. So this conversation won't be like any other one, either.

    Our Conversation is part of a new venture that Steve and I are doing together with Peter Thusat, who serves as our Executive Producer. We call it SMB TrendWire. Go on over to SMB TrendWire, see what's coming up next, and register to listen to Eric -- LIVE! If you register in advance you can even submit questions that you want Eric to answer.

    And while you are over at SMB TrendWire, listen to the Conversation we held with Jeff Cornwall of The Entrepreneurial Mind. Jeff talked about the Five Entrepreneurial Myths. It was an awesome Conversation, and for a limited time it is free to listen to the archived talk.
    Sunday, December 12, 2004
    PowerBlog Review: Tinbasher Blog

    Editor's note: We're backkkk! It's the forty-third in our regular weekly series of PowerBlog Reviews of business weblogs.

    This week's PowerBlog Review is about The Tinbasher Blog.

    Tinbasher is the blog of a small, sheet metal jobshop in the U.K. called Butler Sheet Metal.

    Now, before you go running for the No-doze and the toothpicks to hold open your eyelids to suffer through all the dry gab about bending metal, just stop. Because this blog is entertaining -- no, it's positively hilarious. I guarantee it will have you laughing out loud.

    Oh really, you say? Yes. Really. Try this recent Tinbasher post:

    You probably think that all this blogging business is rather fancy schmancy. That it's all maverick marketers operating from rather plush offices with Wi-Fi access coming out of their ears. And you probably think, by association, that I fit neatly into that little picture.

    If only.

    You'll be awfully pleased to know that I'm currently writing this from inside the electricity cupboard of an old Victorian foundry in some rundown part of East Lancashire. Not only that, but my blogging attire isn't exactly booted and suited. It tends to consist of three fleeces, a jumper and a donkey jacket - and that's just in the summer. I look more like Darth Vader when they took his helmet off than Mr. Business Blogger UK. Can I feel the force? I can't even feel my fingers.

    With us also being in a decrepit old foundry, not too far away from a river, we also tend to suffer from a bit of a vermin problem once in a while. Only the other week I was merrily tapping away at my keyboard when I heard a scratching and a rustling. I looked to see where it was coming from, then, out of the corner of my eye, I saw this rat dangling off a couple of fluorescent tubes above my head.

    With a move slicker than anything you've ever seen in any Bruce Lee film, I managed to jump up, bend like a reed and flick the tubes deftly with my left wrist, sending little Roland back behind the corrugated sheet from where he dared appear in the first place. (There's another version of this tale involving an ear-splitting shriek and said rat falling off the tubes in terror, but I wouldn't pay much heed to that).
    The main person behind the Tinbasher blog is Paul Woodhouse, who reports that he blogs from "Colne in Lancashire - a tawdry little hell hole if ever there was one."

    Besides how entertaining the Tinbasher is, this blog is remarkable for the way it marries up a traditional industrial business with that trendiest of communications vehicles, the blog.

    And what a traditional business they are in -- a blog is a first for this industry. As Paul reports, Tinbasher is the only sheet metal blog on the Internet, saying, "Talk about ploughing a lone furrow. It's one thing being a big fish in a little pond, but I'm the only fish and that isn't healthy. I find the sheet metal industry -- especially in the UK -- to be a webphobic bunch."

    Butler Sheet Metal sees the blog as a way to help break into new markets, i.e. home decorative sheet metal and designer stainless steel. They have a business unit called Planters Direct, which manufactures and sells beautiful, contemporary stainless steel planters.

    Like many family businesses, they don't advertise and they don't have a marketing budget. The blog is a way to present the business as it is, with authenticity and transparency.

    To this end, Paul adopts an informal, slightly tongue-in-cheek tone. He writes on a variety of business-related subjects, interspersing occasional mentions about Butler Sheet Metal's services or Planter's Direct products.

    Stainless Steel PlantersVarying the content is a smart move. That way, Paul keeps it interesting and attracts a much more diverse audience. He is crafting his content for what he thinks his audience wants to read, not simply navel-gazing on the company's industry. After all, the people who are likely to buy the beautiful planters are probably not metal enthusiasts or welders.

    Nor does he overwhelm readers with sales offers. The references to company services and products are scattered here and there, and just enough. Often they are casually woven into relevant posts on current events such as the price increases of steel. In the process of reading the news tidbit, the reader's interest in the products is peaked more so than if being bombarded with hard-sell messages right and left.

    Practically speaking, the blog brings traffic to the company's commercial websites. It also gives them a ready vehicle to communicate with customers in a true voice.

    The Power: The Power of The Tinbasher Blog is in the way it is being used to enter new markets and promote end-user sales, by a small family business with no marketing budget. It's a fascinating lesson in how to craft content that attracts a readership and subtly conveys a marketing message, without becoming soul-less and commercial.

    Saturday, December 11, 2004
    eBay is On Fire!
    eBay has created tremendous opportunities for small businesses selling on the Web. Why? Because it solves their biggest dilemma: how to reach large numbers of potential customers inexpensively. The site truly is "The World's Online Marketplace," as its tagline describes it.

    Apparently investors think so, too. The company's stock is at an all-time high. This MoneyCentral chart, showing the value of eBay's stock over the past four years, says it all. The black line is eBay, with nearly 550% growth. Notice how the rest of the market has languished in that time, but eBay just keeps going higher:

    Friday, December 10, 2004
    Free The Grapes
    Free the Grapes Chain GangI wish I could claim to have thought up the creative title of this post. But actually it's the name of an activist website called Free the Grapes.

    It refers to the movement gaining popular support from just about everyone (except wine wholesalers and state bureaucrats) to dump the outdated laws in the United States restricting the interstate shipping of wine.

    Last Sunday, December 5, was the anniversary of the repeal of Prohibition. (For our non-U.S. readers: Prohibition refers to the Constitutional Amendment that prohibited the sale of alcoholic beverages in the United States from 1920 to 1933.)

    One of the remaining vestiges of Prohibition are laws in 24 states prohibiting interstate shipment of wine.

    Yes, you are reading that right. In nearly half the states in the U.S., you cannot buy wine in another state and have it shipped directly to you.

    This week the U.S. Supreme Court heard arguments about whether to declare the 24 states' laws unconstitutional, on the grounds that they interfere with interstate commerce. The court's decision is expected in June.

    Professor Bainbridge has criticized the laws in a Tech Central Station article, stating, "The justifications advanced in defense of these laws are, put bluntly, ludicrous. *** It's plain and simple protectionism. Michigan, New York, and 22 other states are discriminating against their own consumers so as to protect entrenched local interests."

    Eliminating the laws would help many small businesses, according to the SBSC. It would help the nation's 2,000 small wineries which would benefit from direct sales over the Internet.

    And if this site is any indication (check out the membership directory), myriads of small local restaurants, beverage drive-throughs and other wine retailers think overturning the laws would help them. Without the laws, they would have wider wine choices with more price competition, leading ultimately to lower wine prices.

    Not to mention the move would be very popular with consumers.

    Free the grapes.
    Thursday, December 09, 2004
    Business Plans -- The Inside Scoop
    My interview of Tim Berry, CEO of Palo Alto Software, is now up over at Small Business Brief.

    I was excited to interview Tim because his company developed Business Plan Pro, a well-known business plan software (I've used it in the past and found it to be quite helpful). Tim is down to earth and was kind enough to share some of what he knows about business plans. Here is a sample where he talks about the difficulty of placing a numerical value on "brand":
    "Entrepreneurs can be tempted to "push" the financials to show more value than can be supported. That's especially true in service and technology businesses.

    For example, Internet entrepreneurs have a hard time valuing Internet traffic in a business plan. During the days of the dotcom boom, traffic tended to be overvalued. Today at least the overvaluation is gone. But even today there's still no good way to place a value on Internet traffic per se.

    The same is true for a service company with a strong name and reputation. Capturing the value of "brand" is a challenge. One high profile example I can think of is LLBean's accumulated relations with customers -- its brand reputation. There is tremendous value in LLBean's brand reputation. Yet, LLBean's brand value is not something than can be captured adequately in the company financials."
    Read the whole thing.
    Wednesday, December 08, 2004
    U.S. Home-Based Businesses Grow
    The National Association for the Self-Employed (NASE) reports that home-based businesses are on the rise in the United States:
    As technology increases convenience, more and more self-employed have opened or moved their business into their own homes, giving them greater flexibility and control over their professional and personal lives. According to newly released U.S. Census data, 4.2 million Americans worked from home in 2000, a 23 percent increase from the number of home-based workers in 1990.
    The NASE site has more statistics on home-based businesses here. The statistics are somewhat useful -- although they are getting a little long in the tooth. Maybe the NASE needs to commission a study and get some updated statistics on this growing segment of the small business community (hint hint, all you market researchers out there).

    Tuesday, December 07, 2004
    Lexis Nexis Adopts SMB Pricing
    Here is something you are going to be seeing more of: pricing plans for paid content designed specifically for the small and midsize business (SMB) market.

    That's exactly what Lexis Nexis is doing. SmallBizTechnology.com reports that Lexis Nexis is selling content on a piece by piece basis, between $3 and $10 a pop:
      Barbara Barclay, vice president of New Channels for LexisNexis Corporate and Federal Markets, said, "We developed LexisNexis AlaCarte! with flexible pricing that does not require subscription fees or other start-up costs," said Barclay. "This service levels the business intelligence playing field for small businesses that often compete with larger firms that can support in-house research staff. LexisNexis AlaCarte! empowers them to retrieve the information, how and when they need it," said Barclay.
    It sounds so elementary. Price your product so that small businesses and independent professionals can pay "by the drink."

    Yet many paid content providers haven't bothered to go after smaller pieces of business.
    • They may not view SMB business as being worthwhile. After all, selling a single article for $10 doesn't sound very lucrative when you can sell Corporate customers a $10,000 report or even a $10,000/per month subscription. As long as the Corporate business is around, they think why bother with the smaller stuff?

    • Content sellers are afraid of cannibalizing their high-dollar Corporate business by offering lower priced alternatives. They fear their Corporate subscribers just might opt for lower priced alternatives. Above all else, content sellers are looking for predictable, recurring revenue streams that come from subscriptions -- not small one-off sales.

    • Sometimes it even boils down to a sales channel issue. The SMB market is fragmented and difficult to reach. Low-priced sales "by the drink" don't leave any room for sales commissions or individualized service.
    But all that changes with the Internet, and the availability of powerful, inexpensive search and eCommerce technology. Now it's possible for content aggregators like Lexis Nexis to sell by the drink. Technology makes it possible to sell cheaply without any human ever touching the sale. It's yet another way that technology is opening new doors for small businesses.

    Also, the market dynamics are changing, making small businesses more attractive target customers. First, the numbers of small businesses and independent professionals who use business content are swelling. Second, many content providers are finding that the Corporate markets are saturated. To achieve the kind of growth they are looking for, they have no choice but to penetrate ever farther down market to get it.

    Monday, December 06, 2004
    Best Entrepreneurship Books
    The National Dialogue on Entrepreneurship just came out with its list of best entrepreneurship books published during 2004. Here are a few of the books on the NDE's reading list, along with a quote of what they say about each book:
  • buy The Art of the StartThe Art of the Start by Guy Kawasaki. "It is a fun read and full of useful and interesting tidbits for those starting a new business or a new organization." I wrote a little about the book here, and plan to do a full review of the book soon.

  • buy I Can't Believe I Get Paid to Do ThisI Can't Believe I Get Paid to Do This by Stacey Mayo. "If you feel stuck in a rut and are ready to try something different, this book will be right on target for you."

  • buy They Made AmericaThey Made America by Harold Evans. "This work is something of a coffee table book about entrepreneurship, chock full of interesting illustrated portraits of fascinating entrepreneurs and innovators like Thomas Edison, George Doriot (a venture capital pioneer), and Ida Rosenthal (inventor of the Maidenform bra)." This one looks like an engrossing read.

  • buy An Empire of WealthAn Empire of Wealth by John Steele Gordon. "An Empire of Wealth offers a popular and easy-to-read history of America's economic growth."

  • buy Innovation and Its DiscontentsInnovation and Its Discontents by Josh Lerner and Adam B. Jaffe. "As intellectual capital becomes the key ingredient in wealth creation and competitiveness, an effective patent and intellectual property system assumes greater importance as a generator and protector of such wealth. Unfortunately, Lerner and Jaffe find that America's patent system is not effectively serving such purposes."
  • Just in time for holiday gift giving -- buy one for your favorite small business person!
    Sunday, December 05, 2004
    PowerBlog Review: Opportunity Wales

    Editor's note: Welcome to the forty-second in our regular weekly series of PowerBlog Reviews of business weblogs.

    Opportunity Wales is a blog serving small and medium sized businesses, (SMEs), which make up 99.9% of the businesses in Wales. The site is a European-funded initiative designed to help SMEs with eCommerce.

    The blog was launched in the spring of 2003 and is one section of a larger site. Anyone can register to post on the blog. The site gets registered users from all over the world.

    This is not your everyday, run-of-the-mill blog. It is unusual, even unique, in several ways.

    First, it is bilingual, with most of it written in both English and Welsh. The bilingual aspect is a legal requirement in Wales. As Paul Squires, the Head of Web Services, tells me:

    "...our site is almost completely bilingual in terms of original content - several thousand pages. This makes our site one of the largest Welsh-language sites on the Internet. Where we don't translate is in content sourced externally - including Weblog entries written by users. This is due to both resource impact our side, and the possibility that certain mannerisms (inflections, humour, slang etc) that one uses everyday in English may be mis-interpreted in Welsh - or indeed vice-versa. We overcome this by our 'Best of the Weblog' which is a commentary on the best postings each week, which we write up in both languages.

    So, whilst the interface of the Weblog can be swapped around, we leave it to the user to decide what they want to write and in what language, and then round up the best stuff in a commentary style for everyone to read each week in both English and Welsh."
    Another unusual attribute is that the weblog engine was built completely from scratch -- something you don't see everyday. The weblog was also a finalist in the UK government Web awards 2003 and finalist in the Information Management Awards 2003.

    A third unique factor is how precisely targeted a niche blog it is. The site is designed for Welsh SMEs located in special development zones, who want to learn more about eCommerce strategies. Reading this site you have no doubt who the target audience is. The target audience is rarely so clear on other blogs.

    Yet as targeted as the blog is to Welsh businesses, at the same time the site opens up a new world to non-Welsh readers. Through the blog, readers outside of Wales can learn about Wales and the Welsh language. The site operates as a kind of online ambassador, helping spread news and information about Welsh culture, language and business.

    A notable feature of the weblog -- and one of the best features in my opinion -- is the section entitled "Using Weblogs in Business." This is an 8-page resource section describing how small businesses can use blogs. This section of the site gives specific examples. It helps SMEs get up to speed quickly on business blogs. For anyone wanting to know how to leverage a business blog for their business, this section is a must read.

    The Opportunity Wales blog is maintained in Abercynon, Wales, about 15 miles north of the capital city of Cardiff.

    The Power: Opportunity Wales proves that a blog can be used to serve a niche audience and at the same time introduce the world to that niche audience, its culture and its language.
    Small Businesses To Adopt VoIP in 2005
    Voice over IP (VoIP) -- telephone calls over the Internet using a broadband connection -- may finally start being adopted in meaningful numbers by small businesses in 2005.

    Until recently the hype about VoIP was greater than the actual subscribers. You'd think there were tens of millions of subscribers given all the media reports about VoIP. Yet, in the United States there will be only 1 million consumer VoIP subscribers by year end 2004.

    According to research firm Instat/MDR, businesses are still taking a conservative approach to VoIP. Just 12% of businesses are using VoIP in 2004 (or about 700,000 businesses out of 5.9 million total).

    More larger corporations are using VoIP than small businesses according to Instat/MDR. And that's what you'd expect of a new technology. Small businesses are usually not quick to adopt cutting edge technologies. They can't afford to take risks with technology.

    However, the crescendo of attention on VoIP is rising. It started back in the summer of 2004. It seems that every research firm worth its salt is predicting big jumps in VoIP subscribers in 2005.

    We're seeing it everywhere we turn. We keep running into small businesses -- like this one -- that have implemented VoIP or are seriously considering switching to VoIP.

    And it's not just high tech small businesses and the early adopters. More and more regular small businesses -- retailers, beauty salons, dry cleaners -- seem to know what it is and what it can do for them.

    Research firm IDC predicts that "VOIP will finally go mainstream in 2005...."

    eWeek's Ellen Muraksin writes: "Remember 2004 as the year that VOIP finally penetrated mass consumer consciousness, as friends in normal walks of life began to gain a dim awareness of the stuff I write about."

    Of course, Om Malik has been saying this for some time now, noting this back in August of 2004: "Sandy Wormington, owner of the Kennewick-based Just Roses chain of flower stores, recently signed up for a voice over Internet protocol telephone service in his home. And his business has never been the same since he coughed up $55 installation charge. He pays $20 a month, and expects to save $100 a month on the long distance calls placed to his Just Roses stores across Washington and Idaho. *** More than the loss of consumers, incumbent phone companies should be worried about the loss of TDM voice revenues from these small and medium sized businesses."

    Look for VoIP to be a hot area for small businesses in 2005.

    UPDATE December 8: Alex over at IT Facts has compiled some excellent VoIP links.
    Saturday, December 04, 2004
    Weak Dollar Hits European Small Businesses Hard
    Last week I wrote about the weak dollar and whether it helps or hurts U.S. small businesses (answer: it all depends).

    Here is another side to the story. A New York Times article by Mark Landler profiles the disastrous impact the dollar's fall is having on European small businesses that export to the United States:
    "To get a sense of how fast the falling dollar can ruin a European businessman's day, talk to Udo Pfeiffer, the chief executive of a small German machinery maker in the industrial Ruhr Valley.

    Mr. Pfeiffer's company, SMS Elotherm, builds machines that forge crankshafts for cars. He exports many to the United States and Mexico, selling them for dollars to manufacturers like DaimlerChrysler.

    In recent weeks, the euro has been rising so rapidly against the dollar that Mr. Pfeiffer lost $10,000 in profit in the three days between shaking hands on a $1.5 million deal for a machine and signing the contract. The profit on these machines, he said, will be no more than $30,000."
    Small family businesses that don't have the resources to do currency hedging have been hit especially hard. Read the whole article here.

    Thursday, December 02, 2004
    Upcoming PowerBlog Review Schedule
    One of the Internet trends we spotted over a year ago was that of business blogging. To track that trend, we started a weekly feature back in February of 2004 called PowerBlog Reviews.

    Each week we review notable examples of blogs that are being used for some sort of business purpose. We pick out a few key points about each blog that we think are powerful and serve as a "lesson" to other bloggers.

    We've completed 41 PowerBlog Reviews so far, covering blogs from 5 different countries. We've even had some help from expert guest reviewers Paul Chaney and Wayne Hurlbert, as well as blog recommendations from Fredrik Wacka.

    Here is the schedule of blogs we will be reviewing in future weeks:
    5 December 2004 - Opportunity Wales
    12 December 2004 - Tinbasher
    19 December 2004 - Business Works
    26 December 2004 - Biz Tips Blog
    2 January 2005 - Binza
    9 January 2005 - MaxBlumberg.com
    16 January 2005 - Business Romania
    The schedule is generally booked up about 5 to 6 weeks in advance. If you are interested in having your site reviewed, don't delay. Email me with your request.

    And please leave a comment below with any suggestions about how to make the PowerBlog Review series better.
    Women-Owned Businesses Growing Fastest
    Women-owned businesses are the fastest growing group of businesses in the United States. Minority-owned women businesses especially are growing. That's according to an interesting article by Erin Chambers in BusinessWeek:
    "Business ownership among women in general is growing at nearly twice the rate (17%) as all businesses (9%), according to a new report released this month by the Center for Women's Business Research. And the number of businesses owned by minority women, long the smallest segment of entrepreneurship in the U.S., is growing at six times the rate of all private companies, the study found."
    So what is driving this trend? The article cites two reasons, among others. First, women are being driven by their desire for economic independence. The second factor is the increased societal support -- there are simply more organizations to provide support for startups in general and for women in particular.

    For instance, I am preparing to drive to Pittsburgh tomorrow to attend an Advisory board meeting for a woman-owned business through the PowerLink program. PowerLink is a women's advocacy organization that did not even exist 15 years ago.

    I would also add one other key factor driving the growth in women-owned businesses: the Internet. The Internet has made it possible to spread the word about the entrepreneurial resources available. After all, what good are those resources if no one knows about them?

    The Internet has also fundamentally changed our access to the world around us. It enables a small business to have greater leverage and reach than it otherwise would. I have written about the growth in businesses by stay-at-home moms. Most of that growth wouldn't have happened if the women didn't have the Internet to open up possibilities and bring the outside world to them.
    More news... more trends... more insight...

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