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Thursday, June 30, 2005
A Dangerous Trend
Editor's note: It's time again for another article by expert guest blogger, John Wyckoff. This month he looks at the trend of people trying dangerous stunts, fueled by reality TV.

By John Wyckoff

Reality shows are anything but. However, they are responsible for creating a new and dangerous trend.

There are more "reality" shows on network TV than just about any other form of entertainment. Why? They cost considerably less to produce than other shows. Reality shows have no high-paid actors and plenty of people willing to make fools of themselves in front of a camera.

One of the worst, in my opinion is "Fear Factor" in which otherwise ordinary people do disgusting and/or very dangerous things. Of course, they have safety harnesses and other inhibitors to prevent themselves from becoming gory spectacles that will be picked up by the six-o'clock news.

So, why do I say it's creating a dangerous new trend? Ordinary people often believe they too can do similar stupid or dangerous things and get away with them. The difference is the lack of any form of safety equipment along with a lack of any training or understanding of what can go wrong.

As an example of this trend in the powersports industry, I've watched an "Extreme" TV show where very well trained professional motorcycle stunt riders not only ran up a steep bank but also did a complete double summersault while still astride the motorcycle. I've also seen motocross events where riders seemed to defy gravity and their bikes appeared to be unbreakable. How do they that do it? Training, practice, special equipment. Add to that these riders are very unusual people with very unusual talents.

We've all seen ads for automobiles that depict a car sliding sideways or careening around curves at rocket-like speeds. Usually there is a banner at the bottom of the screen admonishing the viewer not to attempt such feats and stating the ad was done on a closed course with a professional driver.

Unfortunately, most men in their "macho" phase of life think they have the following talents: 1. They are great lovers. 2. They are great drivers. 3. They are fearless. 4. They are immune from physical damage.

In fact they are wrong on all four counts. Let's not go into the first three. I'll leave that up to you, the reader. As for the fourth, they have the highest rates of physical damage of any age group except for the very elderly.

Here's where many go wrong. They see these feats of daring and believe they can do that, too. After all, the guy on TV is no better, stronger or smarter than themselves. It seems many high profile, professional athletes have a tendency to believe their own PR. Since they are in great physical shape, have the flexibility, stamina and agility then it's only reasonable they too can do these stunts and more. When they fail it becomes the fodder of the sports channels as well as the late night TV shows.

What about those who don't get the press exposure? They just get the hospital bills. Sometimes their families get to pay the post-mortem expenses along with the hospital bills. I know of no insurance policies that cover acts of wanton stupidity.

It's true that young men (and sometimes young women) are often more willing to take risks than those more mature. I was when I was younger and I'll bet you were, too. The difference between now and then was the degree of risk and the amount of knowledge needed to evaluate the possibility of failure.

Binge drinking is not something mature people do, it's something those who are barely old enough (sometimes not old enough) to drink alcohol, do. The TV news seems to revel when they can find high school or college kids out of control while drinking to excess and then driving off.

While talking to a law enforcement officer about the problem, he commented that these thrill seekers and dare devils don't seem to have any common sense. My comment to him was that I don't know why they call it common sense when it's so uncommon.

Will this new trend continue and grow? I believe it will. It gives validity to the extreme. It offers excitement, danger and admiration of peers. These reality shows make it look easy. We don't think it could really cause harm because if it did -- "Wouldn't they be forced to take it off the air?" Heh.

OK, now for a reality check. Anything that requires exceptional skill is often made to look exceptionally easy. A tightrope walker makes what he does look easy. The same holds true the trapeze artist. Ice skaters make what they do look almost natural. None of these are things the "average" person can accomplish with any degree of proficiency. All have steep learning curves. All require the training and guidance of experts.

In the powersports industry, ordinary people trying extraordinary and dangerous stunts can lead to lawsuits, serious injuries and death. Along with these extreme trends, dealers and manufacturers are taking more precautions than ever to warn individuals against their own lack of common sense. Much of the OEM's precautions are in the form of elaborate warning labels in very conspicuous places. For dealers, we will soon reach a time when emphasizing safe riding will become as important as explaining product features and benefits.

Like this article? Read more by John Wyckoff:

Harley, Short Sellers and Franchisees

BMW's Ad: No Respect

And be sure to check out John's website, MYOB-2 for special reports and other resources.

Wednesday, June 29, 2005
Microbusinesses -- Smashing Stereotypes
When it comes to microbusinesses -- those very small businesses with no more than five employees -- size isn't what counts the most. These tiny enterprises can land business that seems to dwarf their size. Commitment and a clear plan are key determining factors that give these businesses leverage beyond their size.

A recent story in The Microenterprise Journal illustrates this very point. Since the Journal requires a paid subscription to access it, here is an extended excerpt of the article (quoted with permission of the publisher):
"One of my favorite hobbies is smashing stereotypes. And one of the most egregious sets of stereotypes around, from my perspective, are the stereotypes about microbusinesses -- specifically, the stereotypes that arise because people make assumptions about what microbusinesses can and cannot do, based on their size.

For example, while it is true that most microbusinesses make relatively little in annual average revenues, it is not true that all microbusinesses make relatively little nor is it true that those that do make relatively little do so because they are microbusinesses.

That's why it makes me particularly happy when I come across a company like the Valorem Corporation.

The Valorem Corporation is a veteran-owned, Laurel, MD (USA)-based firm, and is young enough that owner Kyle Haycock couldn't even make a guess at its average annual revenues. It was just incorporated this past March, and Haycock has just hired three new full-time employees.

He needed to do that because he has just landed a six-month contract with the Department of Defense, worth half a million dollars.

So much for what microbusinesses can't do.

Valorem is in the business of supplying linguists and intelligence analysts to the federal government. It is a line of work that Haycock is very familiar with because he has been doing it for the past decade. In fact, that is pretty much what gave him the idea to start this business. According to Haycock, Valorem was formed specifically to be a government contractor.

That means that his business is not likely to stay micro. But it also does not mean that he has to wait until his business "grows up" before he sets out to do what he set out to do.

* * *

Even with all the advantages of being well-versed in the needs of his prospective customer, having all kinds of contacts among the procurement officers he needed to deal with, and a very respectable record of past performance working under other circumstances but performing the same services, he still had three-fourths of a year of administrative tap-dancing to deal with.

Valorem, unlike most microbusinesses, was formed and designed strictly to serve the federal government. For a microbusiness owner who may want to sell to the government but who may also want to do something else, the kind of single-minded tenacity displayed by Haycock can only come at the expense of other business. And, for most microbusinesses, losing current customers because of that single-minded pursuit when you don't even know that you'll win the contract is a seemingly insurmountable obstacle to federal contracting."
Tuesday, June 28, 2005
Box.net -- An Entrepreneur's Tale
Perhaps you've noticed the orange ad for Box.net, our newest advertiser, at the top of the site.

Box.net provides online file storage. A couple of weeks ago, before going out of town on a trip I loaded a number of files on to Box.net. Then, on the road, I simply logged on to Box.net when I needed the files. The process was much easier and faster than trying to transfer files by CD from my desktop computer to the laptop that I use when travelling. (Gear Live has a review of Box.net and gives it the thumbs up, too.)

I was curious about Box.net, and I ended up doing an interview of Aaron Levie, the President of Box.net.

It turns out the company is run by two entrepreneurs who have bootstrapped their business -- and faced the same kind of challenges as countless other entrepreneurs, including almost running out of cash. And like many startups today they exemplify the "virtual business" structure where people work in more than one location.

Here is that interview:

SBTrends: Aaron, where are you located?

Levie: Seattle, and we also have a few people working for us in Los Angeles.

SBTrends: Who are the principals of the company?

Levie: I am the CEO. My partner, Dylan Smith, is the CFO, and we work with various developers, server administrators, technicians, etc....

SBTrends: How are you financing your business?

Levie: So far we have been self-financed, but we are gradually looking around for funding -- though there hasn't been a real need except for expanded marketing.

SBTrends: How did you come up with the idea for the company and get started, Aaron?

Levie: We wanted to make online storage and file sharing much easier than it appeared to be on the Internet. There are other companies that are providing similar services as Box.net, but we set out to make this business simpler and friendlier than the rest.

SBTrends: What's unique about your service?

Levie: Besides (hopefully) being easier to use and more straight-forward than the competition, we have made extensive improvements on typical online file-sharing. Since a large market for us is small businesses and professionals, sharing files with multiple parties, or sharing multiple files that are large becomes burdensome with other services as well as email, etc...

Our format gets any number of files shared instantly, without the hassle of advertisements on the shared page, or other things which may bother the receiving end.

SBTrends: What else can you share about your company or your business?

Levie: We ran out of money after we initially had the system fully developed. That left us with a great website but no way to market it (literally). We were stuck for a while, but came up with a few strategic promotions and soon the user base grew and provided us with revenue to work off of.

SBTrends: Who is the typical customer for your service?

Levie: The typical customer is an individual who would like to backup a large number of documents or photos... which are then shared safely across the Internet with family members or friends -- as well as accessed from the user's home computer/work computer. A secondary use, and one which we are trying to make more prominent, is our work group collaboration feature which allows multiple users to log in to one account with various restriction settings -- as in some users can upload, some cannot, etc...

SBTrends: What do you think people need to know about your company's service?

Levie: I think that your readers, especially, need to know that online storage (whether or not it's Box.net) can be very useful to daily operations and organization of a small business. The benefits are endless, and just as a way to give multiple computers access to the same set of files is a great tool.

Thanks for taking the time to learn about Box.net, and good luck to everyone on their business endeavors.
Monday, June 27, 2005
Economic Conditions Good in the U.S.
In case you were wondering, things in the United States are not that bad off, despite what you read in the media.

In fact, economic conditions have improved for Americans, with virtually every disadvantaged group making positive gains in the last decade, according to BusinessWeek:
"Over the past decade, virtually every traditionally disadvantaged group made gains in absolute terms. Take, for example, families headed by immigrants who entered the country in the 1980s. The poverty rate for such families dropped sharply, from 26.6% in 1995 to 16.4% in 2003, the latest numbers available. Similarly, a combination of welfare reform and tight labor markets helped drive down the poverty rate for female-headed households with children from 46.1% in 1993 to 35.5% in 2003. That may not seem like much, but it beats the total lack of progress in the previous decade. And a new book, Moving Up or Moving On: Who Advances in the Low-Wage Labor Market?, uses a new set of data to look at the wage history of a group of low-earning workers from 1993 to 2001. Adjusted for inflation, those people saw their average earnings more than double over those nine years."
One interesting nugget that is touched on only briefly in this article is globalization.

The old method of evaluating how well off Americans by comparing our situation with others in the U.S. makes little sense in this era of globalization. Perhaps if nothing else, globalization will shake us Americans from the bad habit of looking only at our country and ignoring the rest of the world.
Sunday, June 26, 2005
PowerBlog Review: New Millenium Minds
Read all the PowerBlog ReviewsEditor's note: We are pleased to bring you the seventy-first in our regular weekly series of PowerBlog Reviews of business weblogs. This week's review is being guest-blogged by Lynne Meyer. Lynne Meyer, APR, is president of A Way with Words.

By Lynne Meyer


It's said that you have 30 seconds to make a good impression. The same is true with the name of your blog.

A case in point is the name of Rob Thrasher's blog -- New Millennium Minds. What in the world is New Millennium Minds? The name is creative, intriguing and compelling, and I looked forward to seeing what it was all about.

Rob is Chief E-mail Marketing Officer of ActivSoftware in New Hartford, New York, where he and his partner develop business email communications software for small businesses, law firms, government agencies and Fortune 500-level companies. Rob started his weekly blog in June 2004. There's lots of information here about search engines and marketing via email. He says,
"My main goal with the blog is to gain key phrases and report to e-marketeters how I did it. I decided to start a blog to research how blogs are spidered and catalogued by search engines."
For the most part, many people start blogging because they have expertise to share. Rob employs a technique that can be incorporated into any blog for added value. In his April 27 posting, "Choosing a Search Engine Marketing Specialist," Rob provides a comprehensive checklist readers can use when they decide it's time to seek a web-marketing professional. Regardless of your area of expertise, blog readers appreciate this kind of information. And who knows? A checklist like this just might make readers turn to the blogger for the services they're seeking.

Another interesting technique involves being ahead of the curve publishing a prediction on a topic relating to your field. In his April 12 post -- "New Millennium Minds Prediction Department" -- Rob notes that a master email marketing case study his company published the previous year is now being referred to in a positive light by some of the top research firms in the industry. A blog provides an easy way to highlight positive press coverage or analyst coverage. It's yet one more way to showcase the blogger's expertise, and establish thought leadership.

In addition to sharing good news, blogs can be used to review products and services, and pass along caveats about frustrating or negative experiences. It's exactly the kind of word of mouth that some brand owners fear, as companies like Kryptonite have found to their detriment. In his January 24, 2005 post -- "My Best Posts & Zealous.Org" -- Rob relates one such experience with a site called Zealous.org:
"As an experiment, I submitted my posts to a place called 'My Best Posts' through a web site at Zealous.org. I spent a good chunk of time submitting my posts to drive extra traffic to the blog. I subsequently logged in to add another post. Much to my dismay, my posts were all gone! They deleted all my posts and would only say that my posts -- all of a sudden -- didn't fit in with their goals. So now, rather than reporting that this site is a good resource to help you get the word out about your blog, I'm recommending you stay from using them because there's no guarantee your own hard work won't suddenly disappear with no notice, just as mine did!"
Saving readers from an unpleasant situation can engender increased loyalty, and incline them to read the blog regularly.

One of the most helpful features about this blog is its focus on email marketing. Although it covers other online topics, such as search engine optimization, it provides a helpful source of surveys, white papers and other resources about email marketing.

Check out the New Millennium Minds.
Saturday, June 25, 2005
Competitors Lure Sellers Away from eBay
As the Internet matures, and the number of affordable ways for online retailers to find buyers increases, eBay appears to be facing stiffer competition.

More online vendors are foregoing eBay and deciding to go it alone by drawing visitors to their own websites. Or they are turning to other online venues such as Amazon and Overstock.com.

Dane Carlson at Business Opportunities points to a recent Wall Street Journal article examining this very issue:
"In 2002, John Wieber started worrying about his business, which sold refurbished computers through Internet auctioneer eBay Inc. Although he was earning $1 million a year in revenue, profits had started to slip as competitors flocked to the site. EBay also raised its fees, further cutting margins, and fraud was becoming a problem.

So Mr. Wieber revamped his Web site and began selling through other online companies, such as Amazon.com Inc. and Yahoo Inc. Last year, his sales neared $5 million, but his eBay revenue grew at a much slower pace, making up only a quarter of the total. It will likely fall still lower. Of the auction site, where he got his start, Mr. Wieber says: 'Too many sellers, not enough buyers.'"
The article goes on to note that other online services like Amazon and Google are enticing sellers away from eBay using an old-fashioned tactic: hands-on customer service. Amazon and Google employees actually called one of the sellers and offered their help.

This is not an unusual occurrence, actually. A colleague of mine who runs a large holistic health site reports he was called by Google, offering help in placing AdWords in the site.

Things are changing among many of the big Internet players, and a new emphasis on customer service and wooing sellers appears to be among those changes.
Friday, June 24, 2005
Seth Godin on the Advantages of Small Businesses
Over at my Selling to Small Business site on BNET, I commented on two recent blog posts by Seth Godin, marketing maestro extraordinaire, about the advantages small businesses have over larger businesses today.

Seth, it turns out, is a one-person business. I happen to know from personal experience that Seth reads and answers his own email -- at all sorts of crazy hours.

Yet, he gives the impression of having a large organization behind him. And his reach and impact seem to go much farther than what we normally think of as the reach of a one-person business.

In case you missed Seth's posts, do take a few minutes to read them. Check out Small is the New Big and More on Small.

The comments by others reacting to Seth's premise are the best part. So take some time to scroll through the many comments and links listed under each of Seth's posts. You'll find additional insights from those who agree with Seth, and also those who disagree with him (yes, there are some of those).
Tuesday, June 21, 2005
Cell Phones on Steroids -- The New Computers
Not long ago the Wall Street Journal ran a trend-spotting article about technology and gadgets of the future (requires subscription).

The article interviewed one person who suggested that cell phones have the potential to become the personal computers of the future -- but only if telecommunications companies give up control over the hardware:
"The personal computer for the rest of the world isn't going to be the personal computer. It's going to be the cellphone," says John Sviokla, 47, the vice chairman of DiamondCluster International, a Chicago-based technology-consulting company. "Communication is more important than computation on the human hierarchy of need."

But before that can happen, the cellphone is going to have to change. Specifically, cellphone companies have to surrender their control over the phone's features and capabilities. If phones had standard ports -- such as USB connections -- innovators could develop their own applications without having to wait for the cellular provider to offer them.

"Think of what happened with personal computers when they opened up the architecture," Dr. Sviokla says. "Personal innovation flourished."

So what would he add if he could? He lists a scanner that would enable him to store business-card information in the phone, a global-positioning system, a radar detector, a flash-memory reader that would allow the phone to serve as a portable hard drive and a fingerprint reader "so I could lock my phone by touching it and unlock it by touching it," Dr. Sviokla says, noting that several vendors provide the technology, but it isn't available on any phones on the market.

"The phone companies cannot possibly market all the options that people might come up with," Mr. Sviokla says. "If they open the device, then the market of new adopters can discover the most popular combinations, and then the big guys can pick the popular things and merchandise them extensively."
Opening up cell phone hardware would certainly lead to opportunities for many small technology businesses. Smaller companies often are the innovators, coming up with new uses for technology that no one has thought of.

In a number of technology arenas today, large companies are letting the small fry innovate, and then snapping up those small companies. It's a tried and true way for large companies to develop niche technologies that otherwise might never see the light of day within a large organization because of more pressing priorities. Om Malik identified this trend last year, and I noted it last October in a piece entitled "Big Tech Buying Small Tech Trend."


Hat tip to Rajesh Jain at Emergic.org
for the Wall Street Journal link.
U.S. Entrepreneurship Thrives Despite Bubble
Another study on entrepreneurship is out. This one, by Florida International University, reports that 18 million people in the United States are actively engaged in startups (versus 31 million engaged in startups and established small businesses.)

Yet the report notes a 20% drop in the levels of entrepreneurship in one year, from 2003 to 2004.

Does this mean that America is moving away from its entrepreneurial, self-reliant culture?

Well, not so fast there, bucko.

First of all, even counting the 20% drop, the U.S. still is in the upper third of all countries for overall and opportunity-based entrepreneurship. Among developed or high income countries, the U.S. compares favorably. It has more than twice the levels of entrepreneurship of Western and Central Europe.

Second, as the report notes, the drop in entrepreneurship may be an anomaly. The drop may simply reflect the aftermath of the dotcom bubble.

According to the report, in the United States the peak year for entrepreneurship levels was the year 2000. Those were the days when every 23-year old thought he could get millions of dollars for a mere idea encapsulated in some PowerPoint slides. Venture money flowed like beer at a frat party. Large blue-chip companies actually worried about losing their employees to startups, as the best and brightest went off to work for dotcoms they hoped would turn them into millionaires upon going IPO.

In 2000 the dotcom business I ran commissioned a valuation from a well-known valuation firm. The most interesting part of that valuation process was seeing the comparable values used to peg market value.

The comparable values were from companies with hot names back then.

Yet, had you seen their financials at that time, you would be amazed at how little revenue (sales) some of the hottest Internet businesses had.

And don't even mention profits -- many of the best-known dotcom names at that time were deep in red ink (Amazon, for instance) and wouldn't turn a profit for some years to come. That is, if they ever turned a profit and didn't go out of business first.

Yet, these same companies were valued at hundreds of millions of dollars. I am quite certain that today, companies with the same financials would not be valued anywhere close to the unjustifiably high levels of 2000.

That's the kind of environment we had for entrepreneurship. So is it any wonder that everyone had startup fever in 2000? As the report notes on page 119:
"On the other hand, in the U.S. there has been a 20% drop in participation in the entrepreneurial process -- as defined for the TEA index -- in one year. Given that the peak in the year 2000 may have been an aberration, a reflection of entrepreneurial "irrational exuberance," this decline may not be a major cause for concern. Entrepreneurial participation rates are still more than twice what they were in the early 1990s. It would seem wide to carefully follow developments in the participation in entrepreneurship -- perhaps continuously or at six-month intervals -- to determine if this decline continues."
Hat tip to Doug the InfoMan, who sent me this helpful link.
Monday, June 20, 2005
Midsize Businesses Sell for Higher Multiples
A few weeks ago I pointed out the strong market for the purchase and sale of small businesses.

It turns out that the market for midsize businesses in North America is strong and optimistic, also.

Buyers are plentiful. Prices are up. Financing is available.

That's according to the IMAP 2004 merger & acquisition (M&A) pricing survey for midsize businesses.

IMAP is an industry association of intermediaries who serve the midsize business market. IMAP stands for the International Network of Merger and Acquisition Partners.

"Multiples" are the primary way that the sales price for buying and selling a business is calculated. A number called a "multiple" is multiplied by another number, usually "earnings before interest and taxes" or EBIT as it is known in accounting parlance.

Selling multiples of privately owned middle-market companies increased dramatically over the past two years. In 2004 the median selling multiple for businesses under $10 Million in annual revenues sold through the IMAP network was 5.6 times earnings-before-interest-and-taxes. For businesses of $50+ Million in revenues, the median multiple was 7.1.

What are some other trends? Check out the comments in the Survey results for North America (page 6):
  • Corporate buyers are relying more on acquisitions for growth.


  • Financing is readily available. "Lenders galore."


  • The transportation business is doing well -- the best in 20 years.


  • Large price differences exist between high-tech manufacturers with proprietary technology (high prices), and ordinary manufacturers (lower multiples).
And the outlook for 2005? Also expected to be strong. Seventy-five percent (75%) or more expect to see more sellers and more buyers in the market, and over 90% expect to see similar or better access to financing.

Check out the survey, which also includes European and Asian results, in addition to North American results.
Sunday, June 19, 2005
PowerBlog Review: Small Biz Sense
Read all the PowerBlog ReviewsEditor's note: It is with great pleasure that we bring you the seventieth in our regular weekly series of PowerBlog Reviews of business weblogs. This week's review is being guest-blogged by Lynne Meyer. Lynne Meyer, APR, is president of A Way with Words.

By Lynne Meyer


"Practical ideas that the time-starved small business owner can put to use immediately."

That's the appealing tag line Ruth King puts below the name of the Small Biz Sense blog. As a small business owner myself, the term "time starved" got my attention right off the bat. Can you think of a catchy tag line to use under the name of your blog that will draw potential readers in?

Ruth is founder and CEO of BusinessTVChannel.com, which is "internet television for business people by business people," and her company is almost totally Web based. Ruth blogs from Atlanta, Georgia to help give small business owners access to practical information to help them run their businesses.

Ruth does three things in her blog that I like. Her posting headlines tell you exactly what the post is going to be about. Here are a few examples: "The Power of Word-of-Mouth Marketing," "How NOT to Get a New Customer," "Finding Time When It's Busy" and "A Great Website to Help You Start Your Business." These straight-forward titles enable time-starved readers to quickly decide whether or not they want to take time to read a post.

We all have business reading we're obligated to do. And let's face it, some of this mandatory reading is a chore to plow through. That's why I appreciate the tone of Ruth's blog. It's conversational and friendly, making it easy and effortless to read. A chance to give your weary gray matter a little break, but you still learn something.

The third nice technique Ruth employs is sharing personal experiences to frame business tips she has learned. Ruth frequently uses her hobby -- running marathons -- as in this post entitled "Find Someone to Help When You're Stuck":
"About 10 miles into running the Boston Marathon, I wanted to quit. Fortunately, I met a woman who offered encouragement by telling me that even if you walk to the finish line you're still going to finish. I walked/ran with her for a mile or two. Then I caught up to another person who helped me go farther. I got my 'second wind' and finished the marathon. I didn't know either of these people, but they were kind enough to help a stranger."
Ruth says she realized there was a lesson for business in this experience.
"Many times we want to quit. We make a comment to someone, and it turns out that person helps us see through the problem, the challenge, and we make it to the finish line. So if you find someone who's contemplating throwing in the towel, help them out with some encouraging words."
Inspirational? You bet! Think about it. You may not know the names of the people who read your blog, but maybe one of them is having a bad day in which nothing seems to be going right. What a nice lift (and gift) you can give him or her with your own anecdote. And we all need a reminder from time to time to offer an encouraging word to others.

It's not going to get your blog written up in Inc magazine, but framing business tips in a personal experience is a nice touch.

Whether you're having a good day or a bad day, you'll want to read Small Biz Sense.
Back to Our Regular Schedule
We are back to our regular schedule here at Small Business Trends, after a vacation in the sun.

Some of you may be waiting for responses to your emails or comments here at the site. We are going through messages as quickly as we can, and will get to them all within the next 48 hours.

Meanwhile, many thanks to Martin Lindeskog of the Ego blog for doing such a nice job guest posting in our absence.
Thursday, June 16, 2005
Small Business Optimism Reverses Five Month Decline
It wasn't that long ago that I wrote with some concern about the five-month decline in optimism among U.S. small businesses. Well, the good news is that the latest optimism survey showed an increase once again, stopping the decline.

That's according to the Optimism Index performed each month by the National Federation of Independent Businesses (NFIB).

The NFIB's Optimism Index is highly regarded as small business surveys go, and is even incorporated into the SBA's Quarterly Indicators Report. It also has nearly a 20-year history, so the results can be put into perspective and compared with prior surveys (something many other surveys do not do).

Not that conditions were all that bad when I last noted them. Actually, by historical standards optimism levels remained quite positive even in light of the decline. It's just that the optimism was steadily dropping for five months -- and had the steady drop continued it would not be a good sign.

Here is what the most recent NFIB Optimism Index, released June 13, 2005 (PDF), showed:
    The Small Business Optimism Index rose one point in May to 100.8 (1986 = 100). The May reading reverses a five month decline in the Index from its record high reading of 107.7 in November 2004. Job creation plans and positive earnings trends accounted for the bulk of the improvement. An Index reading of 100 translates to a 1986 economy, the base year for the Index (1986=100). Nineteen eighty-six was a good year when real GDP grew 3.5 percent and inflation was three percent (GDP deflator). In 2005, first quarter GDP grew 3.5 percent. The economy is one-quarter of the way to a 1986 repeat. Trade will produce more risk to GDP growth than it did in 1986, but spending on both foreign and domestic goods and services will be strong.
It's unrealistic to think optimism can keep rising forever. It will go up and down. But the most recent rise in optimism, after the five-month decline, is a positive sign.
Wednesday, June 15, 2005
Top Ten Trends in Internet Marketing
From Larry Chase's Web Digest for Marketers comes the Top Ten Trends on Internet Marketing for the next ten years. That's quite a prediction, as we all know that the Internet world can totally change in a matter of 12 months in today's hyperspeed world.

Nonetheless, since many of the predictions will have a major impact on small business, I am citing the ten predictions here:
    1. Pay Per Call Rings In: Pay per click used to be the height of technology, but in the near future expect pay-per-call to kick in, with clicks transforming into telephone calls to the advertiser.

    2. Feed Marketing Flourishes: Expect to see ads in RSS feeds, podcast feeds and even in video feeds.

    3. Email Marketing Will Survive: "Sp@m issues will recede dramatically, because they have to. Too much is at stake."

    4. Agent, Personal Agent: "Watch for the growth of "agent software" to help you sift through the morass of online information. There's too much relevant stuff for mere humans to sift through now."

    5. Reverb Marketing, In Stereo: "eMarketer points out that many Internet users already use multiple forms of media at once. Even as I write this I'm listening to CNBC in the background. Smart marketers will synchronize their messaging so the end user hears and sees complementary messages at or near the same time."

    6. Blogs Go Multimedia: Blogs will start to offer content in audio and in video, not just text.

    7. TVIP Adds Interactivity: Expect to see TV over the Internet (we already have it in pockets here and there). However, this kind of TV will be different from what we are used to, without as many ads and with more interactivity.

    8. Commercial Content, On Demand: Marketing messages and ads will need to become so appealing that consumers actually want them. The old-style push marketing messages just are not working.

    9. Publishing Faces Tectonic Shifts: Publishers will have to adjust their business models, perhaps by offering more free content online or special editions for online versus print.

    10. Direct Marketers Will Take Over the Internet: This has already happened, although the tools are different. However, the laws of human nature that drive direct marketing have remained the same since Ben Franklin's time.

    11. Internet-Free Zones Become the Hot New Trend (bonus tip): With the Internet becoming ubiquitous, expect to see travel packages with "Internet-free zones" as consumers try desperately to get away from it all.
The original article has a lot more detail, so my advice is to read the whole thing.
Monday, June 13, 2005
The Small Business Climate in Different Countries
My name is Martin Lindeskog and I have been given the great opportunity to do some guest blogging. If you are interested to learn more about me, please read Anita Campbell's PowerBlog Review of my EGO blog. In preparation for writing a guest post, I read Wayne Hurlbert's post, Guest blogging: Higher profile.

I have been thinking on how the small business climate is quite different around the world. I invite the readers of this blog and fellow bloggers to comment on this post and inform about how the situation is in different countries. I have searched for information on Sweden and America. Here are some of my findings:

99.6% of the companies in Sweden could be classified as small businesses. I used the size class 01 - 06 (0 - 99 employees). The information is gathered from Statistics Sweden's Business Register and the Confederation of Swedish Enterprise (Facts about Sweden's economy 2004, page 51).

I must admit that I am a bit surprised by the high number of small businesses in Sweden. According to a 10 year old article (Is America Really Different?) in the Inc. Magazine, Europe is on the same high level as America. Here is an excerpt from John Case's article.

Paul D. Reynolds, Paul T. Babson Professor in Entrepreneurial Studies at Babson College, in Wellesley, Mass., points out that the information we have doesn't allow us to make easy comparisons. "The best we can say is that most industrialized nations have comparable rates of entrepreneurial activity," he says, adding that regional variations within countries are much more dramatic than variations among countries. (Inc.com/magazine, May 1996.)


Comparing my life here in Sweden and my study and work period in America between 1997 - 2002, I think it is definitively a different business climate in Sweden than in America. It is hard to put the finger on it, but the following excerpt from an article by James C. Cooper and Kathleen Madigan (U.S.: Weak Payrolls Mask A Tightening Job Market) in Business Week will hopefully give you an indication.

The importance of the entrepreneur is also evident in recent comments from the National Federation of Independent Businesses, which represents small companies. NFIB's surveys of its 600,000 members indicate job creation among small businesses is "much more consistent with the household survey than the payroll survey." Corroborating that, the personal income created from proprietorships is growing at an annual rate of 10.5% so far this year, up from a 9.2% pace for all of last year and twice the pace of income from wages and salaries. (BusinessWeek.com/magazine, 06/20/05.)


I will try to find figures for Sweden, but I could bet on that Sweden has a lower rate of income created by small businesses than America.

I hope that the American sense-of-life and the entrepreneurial spirit will continue to be strong, and that small businesses will thrive in competition with bigger companies on a free market based on the ideas of laissez-faire capitalism.
Sunday, June 12, 2005
PowerBlog Review: AllBusiness Blog Center
Read all the PowerBlog ReviewsEditor's note: We're pleased to bring you the sixty-ninth in our regular weekly series of PowerBlog Reviews of business weblogs. This week's review is being guest-blogged by Lynne Meyer. Lynne Meyer, APR, is president of A Way with Words.

All Business All The Time
By Lynne Meyer


AllBusiness.com ("Champions of Small Business") has taken a novel approach to blogging. Instead of starting a series of new blogs by professional writers (an approach taken by a number of traditional media sites) AllBusiness.com has gathered experienced small-business bloggers from all over the United States -- New York, Minnesota, Florida, Mississippi, Missouri, Florida, just to name a few -- into one central location called the AllBusiness Blog Center. As of this writing there are 14 blogs available at the Center.

Many of the blogs were pre-existing properties before being ported over to reside at the AllBusiness Blog Center. In fact, we've previously done PowerBlog Reviews on a number of these fine business blogs when they were stand-alone sites. Today, rather than reviewing any single blog, we are reviewing the Blog Center as a whole.

The AllBusiness Blog Center bills itself as "The best business blogs from around the Web." Peter Levinson, product manager for the Blog Center, describes how AllBusiness has taken the metablog concept to new heights, with the site serving as a clearinghouse of sorts for the blogs of several small business owners, designed to help other small business owners. Think one-stop shopping. Says Peter:
"AllBusiness has a number of professionals blogging on the topics of their expertise and sharing their ideas and experiences with other professionals. With these blogs at our site, we provide resources to help small and growing businesses start, manage, finance and expand their business."
Here you'll find a compendium of informational posts about a variety of business topics, including legal, marketing, management, sales, starting/running your own business and business news.

The bloggers make postings as often as they wish, and AllBusiness makes it easy and convenient for them to participate in the metablog site. There's a photo of each blogger, which is a nice touch with so many different bloggers included on one site. According to Peter:
"Each blogger gets his or her own blog and can build their own community around their topic. We make it easy and convenient for our bloggers because we support them with back-end management, marketing, traffic and other resources."
Being organized for the ease of readers should be an important element for every successful blog, and AllBusiness does this well by categorizing each of the blogs into a topical category, such as legal, marketing, management or sales. Some of the categories also have sub-categories. For example, marketing has two sub categories -- direct mail marketing and Internet marketing.

AllBusiness.com is a site designed specifically to serve small business owners. Says Peter, "AllBusiness contains forms and agreements, business guides, business directories, thousands of articles, expert advice and business blogs, along with solutions and services, all focused on the small business market."

Business guide subjects include starting a business, incorporation and tax and government. There are also all manner of business forms -- everything from forms for buying a business, to forms for hiring employees, to forms for websites such as a sample privacy policy. You'll also find a large number of RSS feeds by topic, not limited just to blogs but for various columns and advice.

AllBusiness.com appears to have a strong commitment to blogging. The Blog Center is nicely integrated into the AllBusiness site, with a dedicated menu item for "Business Blogs" appearing as one of the main navigation tabs on the home page and throughout the site, as well as down the left side. In addition, the Blog Center is showcased on the home page of AllBusiness, with rotating visibility given to a couple of the individual blogs and bloggers, too.

AllBusiness is at the forefront of integrating new media forms like blogs into their overall offerings. It will be interesting to come back a year from now and see how it all develops.

Take a one-stop shopping trip to the AllBusiness Blog Center.
Friday, June 10, 2005
Trend of The Alterpreneur
Several weeks ago Alex Bellinger of SmallBizBlog left a comment here about the trend of the Alterpreneur in Great Britain. In case you missed his comment, here is the description of that trend from an article in Freelance UK:
"A new breed of entrepreneurs whose main objectives are to keep their business small and enjoy life are shedding the 'enterprise culture' tag thrust upon them by Government initiatives.

Far from being the next Richard Branson, the overwhelming majority of entrepreneurs simply want "an alternative to the nine to five of a traditional job" that lets them "retain control over their lives."

These are the 'alterpreneurs' -- self employed people that "work to live" so they can obtain "freedom from the corporate treadmill and the chance to build their own lifestyle."
Starting a business often has been the refuge of those who want more control over their lifestyles and working hours, whether in the U.K., the United States, Canada or other countries.

The danger, however, is that entrepreneurs who start a business in order to have a less-stressful and less-demanding work life, can end up working more hours. At least in the United States (and I suspect elsewhere) it often ends up that way.

Perhaps the business takes off and begins to grow, leading to greater and greater demands on the business owner's time. Or perhaps the business requires more hours than the business owner expected, and in this 24/7 world of ours, instead of having fewer demands on their time the opposite occurs and the line blurs further and further between work and personal time.

Oh, the best laid plans....
Thursday, June 09, 2005
How Musicians, Writers and Filmmakers Make Money Today
We have had several guest columnists write about the tectonic shifts taking place in the music and publishing industries (you can find the articles listed on our Experts directory).

I am very pleased to introduce our latest guest expert, Robin Good. Recently I had the great pleasure of conducting a recorded interview with Robin using Skype. He shared his insights about the music, publishing and film industries. In addition to being very knowledgeable and interesting, Robin was kind enough to record the interview and provide it back to me.

Robin Good is a successful art and design director, film and videomaker, radio broadcaster, DJ, TV producer, information designer, computer graphics and multimedia production specialist. He is also a pioneering interdisciplinary explorer of the unfolding new media revolution. His flagship site with its popular newsletter, Master New Media, is well known for its excellent content about the latest developments in new media and the dramatic changes affecting traditional media.

The interview is a 40-minute MP3 recording.

Here are a few highlights from Robin's interview that I have summarized to give you a sample of what you will hear:
  • A revolution is taking place, providing opportunities for independent musicians, filmmakers and writers to make money from niche products. Many are simply choosing to distribute their works on their own, and bypass major studios and publishing houses.


  • As an example of how important niches have become, 57% of Amazon.com's book revenues are from books not available on traditional bookshelves.


  • Artists are saying "Who needs audiences of millions?" Without the marketing burdens and the huge overhead of trying to reach mass markets, artists find they can be successful and make a profit with fewer customers.


  • This shift is giving rise to completely new distribution methods and new kinds of websites that sell the output of independent musicians and writers. Examples include CD Baby, ArtistShare and Magnatune.


  • The film industry also is in the early stages of change. In the U.S. 1,400 independent movies were produced last year. In India 800 movies were produced last year. Today, technology allows nearly anyone to produce professional-looking final product, not just the large studios. Soon we will have central clearinghouse sites for film downloads, just as we have central distribution for books through Amazon and for music through music sites like iTunes.


  • Robin also took a few moments to talk about one of his latest projects, TheWeblogProject. He calls it an "open source movie' meaning that anyone can contribute to it. The film is about blogs. Robin is accepting video and other contributions for this project.
These points are just a small sample of what Robin spoke about -- you'll hear much more in the interview. Be sure to download and listen to Robin Good's interview.
Wednesday, June 08, 2005
Bank Loans for Startup Funding
When I sent out the last Small Business Trends newsletter, I answered a reader question as I always do in the Letters to the Editor feature. The question was: "How Do I Find Capital to Start a Business?"

My answer was: (1) family and friends, (2) angel investors, or (3) work two jobs and save your money.

Shortly afterwards, I received this email containing additional resources for startup capital here in the United States. I reproduce the entire email here:

    Dear Anita,

    There are more resources available to start-ups. Here are some of the ones we help our clients access.

  • Count-me-in, an online microlender for women.


  • SBA Community Express loans, available through Innovative Bank and local business organizations (such as ours).


  • Community lenders. Check the SBA site, click on your state, then click on financing.


  • State governments often have financing programs - check with the economic development units at the city, county and state levels to find out what incentives may be available for your type of business.


  • Network in small business and economic development circles.


  • Also, note that getting a bank loan is a process that you can get help with. Locate a convenient Small Business Development Center or Women's Business Center and meet with their counselors. These organizations have relationships with local banks and can help you find the right lender. They also provide the kind of business planning counseling and courses -- often delivered by lenders -- that leads, eventually, to successful loans. (We have a number of success stories.) They also teach the process of developing a relationship with the right bank so that, over time, you position yourself for a successful loan application.


  • Interestingly, a high proportion of potential business loan applicants have credit problems. Anyone who anticipates needing business financing should first learn their credit score and raise their credit rating.

    I hope you will be able to share this information with your readers. Thanks so much!

    Kind regards,

    Susan M. Kuhn
    Vice President, Entrepreneurial Programs
    National Women's Business Center
Thank you, Susan, for taking the time to add your information for our readers.
Tuesday, June 07, 2005
Top Five Ways the Internet Has Changed Small Business
My Business, the magazine of the National Federal of Independent Businesses (NFIB) outlines the top five ways the Internet has changed small businesses:
    1. Email: Because it changed the way small businesses communicate in business

    2. Google:
    Because it changed the way small businesses advertise

    3. eBay:
    Because it introduced online auction sites where small businesses can now buy and sell for their businesses

    4. Amazon.com: Because it introduced small business to e-commerce

    5. Online networking (such as LinkedIn.com): Because it enables business owners to share ideas and find business partners all over the country
This is a deceptively simple list. On the one hand, it could be dismissed as somebody's musings about popular websites.

But if you want to know "why are small businesses proliferating?" then part of the answer is on this list.

Stop and think of the implications.

All five tools on the list have certainly changed my working life and my business.

With email I'd go one step farther: email has totally transformed my business. Without email my business would move far slower, I would need more physical space (for all those filing cabinets for paperwork), I would need an administrative assistant, and I definitely would have more expense.
Monday, June 06, 2005
Selling to Small Business - A New Site
I am pleased to announce that I am also writing a blog for BNET, the business portal arm of CNET. It's called Selling to Small Business. (Some of you have already found it -- thank you!)

It's written from the perspective of companies -- especially large corporations -- that sell to small businesses.

There are two other BNET blogs I also recommend you check out: Leadership Now written by Don Blohowiak, and HR's Brand New Experience, which is written by Regina Miller. And very soon you will see Church of the Customer content there, too.

Today my post is on the U.S. Small Business Administration's hearings to reconsider the definition of what is a "small business." So go on over and visit!
Sunday, June 05, 2005
PowerBlog Review: Blogging About Incredible Blogs
Read all the PowerBlog ReviewsEditor's note: We're back once again with the sixty-eighth in our regular weekly series of PowerBlog Reviews of business weblogs. This week's review is being guest-blogged by Lynne Meyer. Lynne Meyer, APR, is president of A Way with Words.

So many blogs, so little time
By Lynne Meyer


There are thousands millions of blogs out there. No way can you keep up and sort out the ones you are interested in and the ones you are not. Blog explosion = brain implosion.

That's why Blogging About Incredible Blogs by Ken Leebow is such a great find. Here's what Scripps News Service says about this blog:
"It's the era of the blog on the World Wide Web. In fact, there are so many of them, it's nearly impossible to find the best blogs on your own. Ken Leebow tries to do that with his site at www.incredibleblogs.com. He links to blog journals dealing with anything and everything. If you want to know where you might find the best blogs on the Web, or what makes a good blog, this is the place to start."
Ken heads up his own book publishing company and has authored a book that's a compendium of incredible web sites. He thought about authoring a similar book about incredible blogs. Instead, however, he decided to do it in -- what else? -- a blog format.

"Since I've been in the technology world for more than 25 years," he explains, "I simplify technology for the general public. I review technology and trends and assess their long-term visibility. I take out the hype -- and there's lots with blogs -- and report the real meat to my readers. My main goal now is to be a blog expert and simplify blogging for the uninitiated, and also provide some information for experienced bloggers."
Here's a good tip for small business owners with blogs who want to elevate their profile by giving speeches. In addition to operating his own publishing company and writing books, Ken is a speaker. He has used his blog well to promote his speaking business. "One of my reasons for having a blog is to increase these opportunities," he says. "Over the past five months, I have landed 12 speaking engagements as a direct result of my blogging efforts."

Brevity and links. These are the two elements I like best about Ken's blog. Ken does not make you wade through a lot of blather. He provides just a quick paragraph or two of his own comments regarding someone's blog and then gives you the blog link. Straight forward. To the point.

Is there an expert in your field? Why not include his or her link in your blog as a service to you colleagues in the field as well as general readers? One neat business link Ken offers is The Tom Peters Wire Service. In a May 17, 2005 post Ken says of the service, "At this blog," says Ken, "Tom Peters filters out tons of clutter and feeds you interesting articles that appear in major publications."

Bottom line? You'll want to read Ken's terrific Blogging About Incredible Blogs regularly!
"Ask the Expert" Business Blogging Session
I'll be the featured Expert on "Ask the Expert" on Monday evening, June 6, 2005. Join me from the comfort of your home or office on BusinessTVChannel.com.

I'll be talking about how to develop a competitive selling advantage using blogs.

Find out how I've used blogs to create one for my business -- without costing you an arm and a leg!

This is a live, Internet television show on www.businesstvchannel.com at 7 PM Eastern U.S. Time.

Here's your opportunity to learn the answers to questions like:
  • What is a blog?

  • What can it do for me?

  • How can I start one?

  • Will it really help my business?
You can call in (or chat in) and pick my brain and make me think.

If you miss the program live, or you want to watch this dynamic program again, you can watch it from the archives until July 6, 2005 at your convenience 24/7.

To participate, log onto www.businesstvchannel.com, and subscribe for only $1 (regular 30-day subscription price is $19.95).

Put my name, Anita Campbell, in the promotion code on the subscription page.

Remember: no long term commitments -- you can cancel at any time. And that $1 subscription will get you access to a variety of high quality programming for a full 30 days, not just my session!
Friday, June 03, 2005
Hottest Sites to Find Small Businesses for Sale
One of the trends that we noted over at our sister site, TrendTracker, is the trend of more small businesses changing hands. In other words, more small businesses are being bought and sold these days.

Indeed, Marketwatch just wrote an article to this effect, quoting us.

Since readers frequently email us with questions asking how to find businesses to buy, or sometimes how to go about selling a business, I thought I would outline some of the hottest places online to look for businesses for sale today.

But first, some background information.

Many small businesses today are sold through business brokers. A business broker is an intermediary who helps bring buyers and sellers of small businesses together. In some ways they are similar to realtors, except that they sell businesses instead of real estate.

At the Corporate level, such professionals might be called investment bankers, M&A professionals, or similar exalted titles to match their huge fees.

But in the small business market their title of "business broker" simply matches what they do, broker businesses for sale. And their fees are not the multi-million dollar fees of the big boys, but more realistic for the market.

A former colleague and friend went from being an executive in a NYSE-traded company, to opening his own business as a business broker.

He and his partner started out as the only business brokers in a small town in Ohio. Things are booming, and it is becoming much more common nowadays to buy and sell small businesses. They have since merged with another firm and now cover a wider geographic area -- three states.

Says my friend, L. Don Prince of Business Resource Group,
"We find there is more interest than ever in buying and selling businesses in the small-to-midsize-business market. From my perspective things are hot. According to a recent article in Fortune magazine 3.5 million people between the ages of 40-58 lost their jobs between 2001-2004. Ouch. Five percent of the baby boom population... a lot of them have money and can "buy their next job." Additionally, baby boomers who own businesses are rapidly approaching retirement. I think these are two key drivers of ownership transfer activity."
I asked Don for the best places to find small businesses for sale on the Web. I thought if anyone would know, he would. He actually took a few minutes to sit down and write out a list of sites with small businesses for sale.

Here is the list of sites he gave me:You heard it from an expert.
Wednesday, June 01, 2005
Narrow Niche Magazines are In
Magazine publishing is slicing itself into ever-narrower niches. Each year sees a growing number of new niche titles catering to very specific interests.

The reason for this trend? Something dubbed "narrow-casting" (as opposed to broadcasting). A BusinessWeek article highlights the trend:
"NARROW-CASTING." Part of the boom derives from an old phenomenon: What entrepreneur wouldn't love to see his or her name as editor or publisher emblazoned on the inside cover of a magazine? And now, the barrier to entry, at least from a technology standpoint, has never been lower, with sophisticated publishing software and high-speed Internet connections commonplace.

Combine that with Americans' greater discretionary income to spend on leisure, which allows them to more fully cultivate interests, from cooking to coin collecting, and you have a trend. "I call this phenomenon narrow-casting, where people want to know more about just one subject, and they either flip to a TV channel that offers that information or pick the magazine that does," Husni says. "I mean, you have tons of new magazines on fishing, a magazine for landscaping, even furniture painting -- you name it, and we've got a magazine for it."

Last year saw the launch of 125 new magazines on crafts and hobbies, 83 on specific geographic regions, 59 on home design and services, 57 on sports, and 41 on different types of cars. The latest craze: "There have been eight poker magazines launched in just the past six months," Smith says.
Of course, as with any startup, the chances are that startup magazines will not be successful. That doesn't seem to stop entrepreneurs from starting new ones, believing that theirs might be among the small percentage of successful titles.

Now, if the large publishing houses would just catch on that narrow niche titles are what the public wants....
Privatization of the Space Business
Space travel is moving from being a government-led initiative, toward being driven by private businesses. NASA's role is shifting.

One example of this shift is SATOP. SATOP is a service of NASA designed to transfer know-how from NASA to the private sector.

Small businesses in need of engineering help may be eligible to receive up to 40 hours of free technical assistance from SATOP. Here is what the SATOP website says:
"The Space Alliance Technology Outreach Program (SATOP) strives to transfer the knowledge and technology of the space program to small businesses. Any type of small business is encouraged to submit a technical challenge to SATOP. If SATOP is able to assist, the small business is provided with up to 40 hours of FREE technical assistance from a scientist or engineer in the Space Program."
But SATOP is simply one example of this new direction.

We wrote about this privatization trend a year ago, in a piece called The Entrepreneurization of Space.

Business ventures are popping up around the fledgling business of space. Now there will even be a conference revolving around the business of space and new opportunities on the horizon, as noted in a Florida Today article: "Central to this year's conference will be new business opportunities that will be created by the new direction NASA is taking and a new space tourism industry that is on the verge of becoming reality."

It will take years before we start to see regular space tourism travel, of course. But that does not change the momentous nature of the shift we are living through.
More news... more trends... more insight...

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