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November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Sunday, July 31, 2005
PowerBlog Review: AutoMuse
Read all the PowerBlog ReviewsEditor's note: We are pleased to bring you the seventy-sixth 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

AutoMuse, a blog written by E. L. Eversman, covers its subject matter from a unique perspective. In fact, according to E.L., it's currently the only place of its kind on the Internet.

As you might guess from the title, AutoMuse is an automotive blog. E.L. is the chief counsel for Vehicle Information Services in Bath, Ohio, USA. And the blog is also a "blawg," covering legal topics as well.

E.L. calls it "just downright useful information" for consumers, attorneys, car people and anyone seeking specific information, including automotive-related legislation, the conflict between insurance companies and collision repairers, diminished value and a disinterested opinion of how cars hold up after use. Says E.L.:
"I always thought it was odd that there were lots of reviews about new cars, but no one ever bothered to provide information about whether it would be a great vehicle after 3 years and 25,000 miles. I try to accommodate that need as well as provide a wide range of auto-related information."
Since Vehicle Information Services pretty much owns this market segment, anything AutoMuse provides is new territory.

Despite this being a "blawg," AutoMuse covers a very wide range of topics that appeal to industry insiders, consumers, lawyers and others. The writing style is straight forward and there's everything from security breach notification laws and the design and handling of the Thunderbird Convertible, to the "Can-I-Sit-Behind-Myself Test."

On the topic "Security Breach Notification Laws Get Insurer Attention," E.L. reports that the National Association of Mutual Insurance Companies (NAMIC) notified its members about 19 newly enacted state security-breach notification laws, warning more states will likely follow suit. E.L. remarks that "given the amount and extent of personal information insurers collect in claims processing, I shudder to think what information identity thieves could get if they hacked into insurer files."

About the aforementioned seat test, E.L. reports, "I'm 6' tall, and in many cars, I can't comfortably sit behind myself. In the Mazda5, I didn't have a problem."

Blogging has proved to be a superior medium for raising awareness of and rallying support for a very important issue in the U.S.:
"Until I started blogging about problems between insurers and collision repairers over fixing vehicles, most people weren't aware that we don't have used motor vehicle safety standards. In other words, if your brand new car is involved in an accident two days after you buy it, it may not meet any of the crashworthiness or safety standards it had to meet upon leaving the factory after it's repaired and returned to you."
Even though E.L. had raised the issue in other ways, including being published in legal journals, quoted in trade publications, and as a frequent speaker, there was little response until the blog. "Since I began blogging about this, however, I've gained the support of automotive engineers, auto manufacturers, collision repairers and some attorneys to help me find a mechanism to ensure that used motor vehicles continue to meet a level of ongoing safety. I owe this all to the power of blogging."

You'll find a lot more at this informative blog, including roundups of automotive-related posts from around the blogosphere, known as the Carnival of the Cars. Finally, we'd like to point out that AutoMuse has achieved recognition, by being named in the recent Forbes Best of the Web blog awards in the category of Automobile blogs.

Head on over and check out this informative resource, AutoMuse.
Friday, July 29, 2005
Profile of Small Business Online Behavior
Fortune magazine has created a profile of small business, based on its own Zogby/Fortune Small Business survey of 2000 entrepreneurs, as well as other published surveys.

So what does it show about small business and online behavior? An interesting picture emerges:
  • 81% of all entrepreneurs plan to increase tech spending by 20% in the next two to three years

  • 68% say they'll adopt new tech products in the coming year

  • 36% plan to buy laptops in the next year

  • 10% include blogs in their marketing plans

  • 51% of all U.S. small firms lack a website

  • 60% of all companies on the Internet use their site primarily to provide information about their business

  • 10% of small firms with websites use the site primarily to sell goods and services over the Internet

  • 26% of small firms use the company website both to provide information and to sell goods and services

  • One-third of all small firms have been affected adversely by a computer virus. Some 83% currently use antivirus software
Note: although the article doesn't specifically credit the Hewlett Packard/Harris study we reported on back in May 2005, some of the statistics are clearly from that survey.

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Thursday, July 28, 2005
Forbes Magazine Best of the Web: Small Business Blogs
Small Business Trends has been named as a Forbes Best of the Web in the category of Small Business Blogs.

I'm honored to be named, especially in the company of such other world-class blogs, including:

Duct Tape Marketing
All Business Blog Center
Church of the Customer
Fresh Inc
Entrepreneurial Mind
Small Business Brief

To all Forbes readers visiting for the first time, welcome! I invite you to please have a look around at our Experts directory, PowerBlog Reviews, TrendTracker, and our Newsletter. This site is a true labor of love.

Thank you, Forbes!
Wednesday, July 27, 2005
Barbers Reinventing Their Industry
The venerable small business trade of the barbershop is changing. For 30 years barbershops were in a long decline in which the numbers of barbers in the United States kept going down. However, since 2001 the industry has been making a slow resurgence.

How have they managed to turn the industry decline around? By reinventing their service offering to appeal to what customers want today.

Barbershops are going upscale, offering a "corner barbershop feel with spa amenities," according to a recent article in BusinessWeek.
"The room where Crawford trims beards, shaves necklines and offers hair replacement has a babbling rock fountain and a view of a lush courtyard. Clients in the waiting room relax in overstuffed chairs to the tunes of Kenny G.

Upscale barbering is beginning to spread outside trendsetting areas such as New York and Los Angeles as more barbers try to win back customers lost over the last decade to the more stylish, male-friendly salons.

* * *

Since 2001, barbers have been making a slow resurgence, and the U.S. Department of Labor expects the number of barbers to grow 6 percent by 2012. That's lower than the average 28 percent expected for all personal care services, but it represents a turnaround in a trade that had been on a decades-long decline."

This is an admirable story about how to reinvigorate an aging industry when consumer tastes change. I wonder how many other small business industries could benefit from such forward-looking innovation.

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Monday, July 25, 2005
Jeff Nolan, Venture Capitalist, Talks With Us
My interview of Jeffrey Nolan, a venture capitalist with SAP Ventures, is now up over at the RFID Weblog. He talks about which kinds of RFID businesses are getting venture funding today -- and which kinds are not.

Jeff is himself a blogger. Actually he is my favorite VC blogger because he is prolific and has a wide range of interests. His blog is Venture Chronicles by Jeff Nolan.

One interesting side note came up in the interview: he says he gets virtually all of his reading material these days from blogs. And all I have to say about that is, if you are an entrepreneur in a high-growth industry looking for venture funding some day, you definitely should be reading the VC blogs like Jeff's. And probably writing your own blog.

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Sunday, July 24, 2005
PowerBlog Review: Landfair Furniture
Read all the PowerBlog ReviewsEditor's note: Welcome to the seventy-fifth 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

The Landfair Furniture blog is written by Mike and Bev Landfair.

They are the owners of Landfair Furniture & Design Gallery and Furniture Annex in Portland, Oregon. In addition to their Landfair Furniture & Design Gallery store, they have an online shop, Landfair Furniture Annex. They're using their blog to drive traffic to the online site and boost awareness of their store.

Even though they just started their blog on March 15, 2005, they report that it has already reaped handsome rewards for them. Part of the reason is that, in addition to showcasing their own operation, the Landfairs are generous in helping promote others. They feature local designers, the furniture companies whose lines they carry and even a local home show sponsored by a local realtor.

For example, the Landfairs were so impressed by the values of one of the furniture companies whose products they sell that they included the company's values, mission and goals in one of their postings. What a terrific way to cement a relationship with a vendor!

They do a great job offering a platform to local designers, with Mike and Bev interviewing the designers and posing questions.
"Designers don't have time to market, and this is our way to help them market themselves. We announce each interview in advance and get the word out as widely as possible. Including these interviews has resulted in some clients for the designers. It's been a very effective way for us to demonstrate to designers that it makes sense for them to work with us, not only because of the quality furniture we have to offer, but the marketing support we give them."
The Landfairs use an innovative idea to bring people into their store. Bev signs off the blog with this offer:
"Mention this blog when you visit our store, and we'll have a token of appreciation for you."
Who knows? If someone is in the market for a new couch or needs a little design advice, this little gracious touch could be just the thing that brings them into the Landfair's store.

When the Landfairs included excerpts from an interview that appeared in someone else's blog, the interviewee -- Toby Bloomberg of Diva Marketing -- emailed the Landfairs. "She suggested we come up with ten tips for buying furniture to put in one of our postings. We followed her advice and also reported on the top ten decorating trends for 2005."

The Landfairs' blog also helped them get media coverage. "Because of our blog, we were interviewed in the Business Journal. They featured us in two articles, including a photo, about how we're using our blog to build our business."

So is the Landfairs' blog helping their business goals? Absolutely, says Mike. "In an economy that still seems a little slow, our traffic to our main store has increased, and sales are up a healthy percentage over last year."

Even if you're not in the market for a new couch or looking for decorating tips, visit the Landfair Furniture blog to see all the things the Landfairs are doing right with their business blog.
Friday, July 22, 2005
Small Businesses Bypassing Big Cities
BusinessWeek.com points out the trend of entrepreneurs bypassing big cities in favor of small towns. The article highlights the fundamental shift our economy is undergoing, as small businesses and small locales take on greater importance:
"With the old-line manufacturing economy almost a thing of the past and service and information economies taking its place, the enticements that make a city attractive for entrepreneurs also are changing. The traditional menu of tax incentives, low office rents, and favorable regulatory environments remain in play. But more frequently, observers say, a host of variables that emphasize quality of life, population diversity, infrastructure, and a culture of creativity have become weightier matters to consider when choosing a city.

Indeed, in his book, The Rise of the Creative Class, Carnegie Mellon University professor Richard Florida argues that more than 30% of the American workforce -- some 38 million people -- now makes up what he calls the "creative class," in which he includes artists, scientists, architects, designers, musicians, and the like. That trend, in turn, has caused a fundamental shift in values, attitudes, and subsequently, the economy.

THINKING SMALL. From this creative class come some of the most innovative business ideas, and from those come employment -- roughly three-quarters of all new jobs are generated by small businesses, according to the Small Business Administration. The net result is that a number of unexpected cities are becoming fertile breeding grounds for entrepreneurship."
Hat tip to Dane Carlson at the Business Opportunities Weblog for the link.

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Wednesday, July 20, 2005
Illegal Immigrants are a Lucrative Customer Opportunity
Throughout its history, the United States has been a welcoming place for immigrants. (Statue of Liberty: Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore....)

But our porous borders have led to unprecedented numbers of illegal immigrants over the past two decades. Estimates of illegal immigrants in the United States range from 10 million to 20 million people, depending on which source you use.

Despite all the outcry against illegal immigration, businesses have caught on to the potential and simply see dollar signs. An article in BusinessWeek describes how businesses in various industries are targeting the illegal immigrant market:
At the same time, though, the fast-growing undocumented population is coming to be seen as an untapped engine of growth. In the past several years, big U.S. consumer companies -- banks, insurers, mortgage lenders, credit-card outfits, phone carriers, and others -- have decided that a market of 11 million or so potential customers is simply too big to ignore.
And it's not just large businesses that are profiting by marketing to illegal immigrants. Small businesses -- ranging from insurance agents, to attorneys, to used car dealers, to check cashing outlets, all the way down to the corner convenience stores -- are profiting from this group.

For additional background, there is also an NPR radio segment on the same topic.

The upshot of the story is that no one seems to believe the government will crack down and deport illegal immigrants. One way or another, illegal immigrants will be assimilated into American society, even if it takes the capitalists among us to do it.

How do you feel about this trend? Should businesses sell their products and services to illegal immigrants?

UPDATE July 24: There is also a discussion going on over in the Small Business Trends forum.
Monday, July 18, 2005
Mobile Phones Transforming Small Businesses
What is the most significant piece of technology to impact small businesses worldwide?

The computer? The fax machine? Desktop software?

Try the mobile phone.

Emeka at the Timbuktu Chronicles points to a Reuters article about small business people in Kenya whose sole piece of high technology is likely to be the mobile phone:
"The mobile phone has become the most essential work item for Theuri, a Kenyan plumber, electrician and small businessman who, like so many others in the East African nation, makes a living from various different jobs at the same time.

Thanks to an explosion of growth in the mobile phone industry in Kenya over the past five years, Theuri says his plumbing-electrical business has grown by about 50 percent.

He also operates a community payphone via the mobile network and further cashes in on the boom by charging batteries for a fee. "Mobile phones have helped me very much," Theuri said.

"Sometimes I receive as many as five calls a day for different jobs. Were it not for mobile phones, jobs would have been very minimal. With the phone, I am well known."

Theuri says his phone number goes around by word-of-mouth from satisfied customers.

He is among thousands of Kenyans, many of them poor, who have taken advantage of the phenomenal mobile expansion to ease the way small businesses operate.

Painters and masons now advertise their numbers on trees by the roadsides in Nairobi. In the past, they would have sat outside hardware shops looking for work from people who have just bought nails, cement and other building supplies."
See also my post of last month, "Cell Phones on Steroids -- The New Computers."

What technology do you think has impacted small businesses the most? Leave your comment below.

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Sunday, July 17, 2005
PowerBlog Review: Kiger's Notebook
Read all the PowerBlog ReviewsEditor's note: We are pleased to bring you the seventy-fourth 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

With the avalanche of technology and growing acceptance of the Internet, newspapers launched web sites to keep up. Blogs are now one the newest web-based communications formats, and some savvy newspapers are embracing this new concept.

One such newspaper is the Post-Bulletin of Rochester, Minnesota. Using a blog -- Kiger's Notebook -- Business Editor/Assistant City Editor Jeff Kiger expands his connection with readers of his weekly print column.

Jeff is conscientious and prolific about his blog -- often making three to five posts a day, Monday through Friday. When asked to describe the purpose of the blog, he says:
"I provide breaking business news and include a variety of news items such as store openings and closings, business expansions, major hirings and layoffs, and stock news that can help readers in their business decisions, marketing plans and sales calls."
Yes, it's a lot of effort, but the blog has paid off already. It has generated lots of ideas for Jeff's column, as well as new sources:
"Since I launched the blog earlier this year, it has easily generated at least six items that can be used for my weekly print column. The
blog has connected me with more sources and deepened my link with my existing sources."
Businesses are always looking for new customers, and if you have a new product or service to publicize, you're competing with lots of other businesses for column inches in any newspaper. As a newspaper business columnist with an active blog, Jeff is in a unique position to help business owners on both fronts. Not only is he covering the business news, but the information and insights he provides have helped local businesses land new customers. For instance, Jeff included this happy reader's email in one of his postings:
"Both Terri and I enjoy your blog. She finds it helpful for keeping in touch with new businesses coming along. Your announcement of Coldwater Creek led her to contact them and get their lodging and meeting business."
Kiger's Notebook has great focus. As befits a local newspaper, the blog content is entirely about business issues affecting the great Rockester Minnesota area.

One of the most interesting aspects to this blog is the deliberate way Jeff uses it as a two-way communication vehicle. He reaches out to those in the local community for leads and interview sources. If you search under his category entitled "Tips for Getting in the Paper," you will see the way he requests reader help on stories he is putting together, as well as his open invitation to sit down for coffee with any reader.

The blog's tone is conversational, yet professional. Because it is conversational, Jeff can report on events as they unfold, even when he does not have all the facts and isn't sure it is a "story" quite yet. That is hard to pull off in a print newspaper. But in a blog it seems to fit somehow.

Businesses in Rochester, Minnesota, are fortunate to have Kiger's Notebook. As blogs and Web versions of print newspapers evolve closer and closer together, my bet is that many other savvy business newspaper reporters will launch their own blogs as "companions" to their regular columns or stories, and will use them as two-way communication vehicles.
Saturday, July 16, 2005
The Advantages of Small Businesses
Seth Godin says it is better to be small, as long as you think big.

In two posts Seth explains why small businesses are so popular. He also explains the advantages of being a small business and why small business owners make the choices they do. He writes:
"For the last six years, I've had exactly one employee. Me. This has changed my worklife in ways that I hadn't predicted. The biggest changes are:
1. the kind of project that's "interesting" is now very different. It doesn't have to be strategic or scalable or profitable enough to feed an entire division. It just has to be interesting or fun or good for my audience.

2. the idea of risk is different as well. I can write an ebook and launch it in some crazy way and see what happens. I can build a dot com enterprise with a questionable business model and just see what happens. Because my costs are a whisker compared to a large organization, there's just no comparison in the way I can approach something (compared to, say, a publisher).

Does this mean that little companies just do little things? Of course not."
Check out Small is the New Big and More on Small. They present a very interesting viewpoint about small businesses.

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Friday, July 15, 2005
The Trend of the Fluid Retiree
We hear a lot in the United States about the aging Baby Boomer population (those born between 1945 and 1964). Last year the youngest Baby Boomers turned 40. This year the oldest Baby Boomers turn 60.

So what are those Baby Boomers doing in their later years? About 1 million of them have taken to living on the road in their recreational vehicles "RVs." (If you are from outside the U.S. and have no idea what an RV is, you can see some here and here.)

Not only are they living in their RVs at least part of the year, they are becoming a source of part-time and seasonal labor for businesses, especially small businesses. In the past seasonal businesses such as campgrounds, hotels and amusement parks hired teens and young people. But now they are increasingly looking to older, mobile workers who -- turtlelike -- bring their homes with them when they travel. Journalist Adam Geller explains in this Associated Press report:
"Most of the jobs on offer are from hotels, amusement parks and campgrounds. With the supply of seasonal workers limited in many rural areas, some employers have been pushing to draw RV-dwelling workers.

Last year, for example, Kampgrounds of America Inc. launched an incentive program designed to attract working campers, offering them free nights at member campgrounds as they motor between jobs, as well as discounts and sweepstakes drawings.

* * *

Managers at Adventureland, an amusement park outside Des Moines, Iowa, also have recruited RVers. Until five or six years ago, virtually all the park's seasonal staffing was done locally, and included mostly younger workers.

This year, about 400 of the 900 employees are RVers, most in their 60s, a boon for a park that was increasingly competing with retailers, casinos and other businesses for local employees. The older workers often arrive with an optimistic attitude and better work ethic than younger workers, said Steve Anderson, the park's personnel director."
I see this RV-ing senior workforce as part of a larger trend -- a trend in which we will see much more fluidness between retirement, working and entrepreneurship. I call it the trend of the "fluid retiree."

In the U.S., it used to be that someone reached the magic retirement age of 65 and stopped working. Period. Now many more people "retire" earlier, but their retirements are not traditional in the sense of not working. Retirees take jobs from time to time, and they even start and continue their own businesses during their "retirements." Their state of employment is based not on some grand career plan set in motion 30 years earlier, but rather on their needs and desires this year or this month. If they need the money or if they simply want more challenge and social interaction, they may take a job or start a business.

I would love to hear from others outside the U.S. Is this trend of the "fluid retiree" something that other countries are experiencing? If so, what is driving the trend?

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Thursday, July 14, 2005
Trends Affecting Small Independent Retailers
I finally had a chance to read a powerful white paper about trends among small retailers, called "Challenges of the Future: the Rebirth of Small Independent Retail in America." It is a very good roundup of the trends and pressures affecting small business retailers today.

Here is the background for how the white paper came to be written:

"This white paper originated from an observation and a supposition by Jim Baum, a highly active and successful Morris, Illinois small, independent retailer. His observation was that macro and micro trends affect the small independent entrepreneur differently than their large competitors. His supposition is if small independents could just step back, take a deep breath and think about what's really happening, what's changing and what's just over the horizon, they might act differently. They might change how they do things. They might experiment more to take advantage of new emerging opportunities. They might see solutions more clearly. They might find new ways to connect more closely to their marketplace."

The white paper identifies eight trends affecting small independent retailers today.
  • Personalization - "Knowledge of customers' birthdays, favorite colors, time of day they like to shop, and other information is not just pleasantry any more. It can be an essential driver of sales. So while big companies employ slogans like 'reach out and touch someone,' it is more likely the small independent retailer who can actually shake their hand."

  • Value equation - Customers are more becoming more demanding and expect more value. "And so, the traditional retail power structure has permanently shifted from sellers to buyers. Doing business as usual can mean doing no business at all. Buyers now hold the trump card."

  • Increased Competition - Competition is growing in strength and numbers. "Because of the presence of the Internet and the increasing clout of large national chains, small independents must not compete on price. To do so is a death wish. It is not sustainable. It is not winnable. And it will likely lead to ruin.

    The real strengths of successful small independent retail revolve around specialization, differentiation and finding profitable, defendable and sustainable niches."

  • Changing Demographics - Three demographic trends are bringing profound change and opening up new opportunities to serve these demographics: (1) the aging American population, (2) the growing Hispanic population, and (3) Generation Y -- born between 1981 and 1995 -- which is the largest American consumer group in history.

  • Community Activism - "There is a growing national trend of community resistance to unrestrained retail development in order to protect local community personality, feel and values."

  • Health Care Costs - "The most important domestic problem in the U.S. is the healthcare insurance crisis. While this affects everyone, it hits the small business especially hard due to the runaway costs of providing benefits to employees. It creates a real competitive disadvantage."

  • Changing Consumer Attitudes and Behavior - "The traditional customer definitions and delineations have been blurred by the sheer volume of marketing activity across the entire socioeconomic spectrum. * * * Consumers want a transparent buying process devoid of hassles. A retail experience that fulfills these dual emotional needs will be highly valued."

  • Urban Sprawl and Real Estate Development - "A recent trend in new retail development is to create community spaces of mixed-use that exhibit a strong sense of place. Many of these developments called 'the new urbanism,' incorporate features more in keeping with feelings of towns and neighborhoods vs. traditional large retail centers."
Download the entire white paper on retail trends here (PDF).

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Tuesday, July 12, 2005
Small Businesses Resisting Open Source?
Dana Blankenhorn at ZDNet wonders aloud why small businesses resist Linux.
"I do know that inertia keeps me from making more use of Linux than I do. Distribution channels for open source systems are thin, and the assumption is help will be hard to come by.

So I want to throw this open to our small business readers, especially those who continue to use Windows in their operations. Is it inertia, can that inertia be broken, or is there another reason we don't give Linux a chance?"
Well, I happen to agree with one of the comments to the above blog post, commenter number 76, Otto_Delete. He says "Most businesses can save a lot of time and money using Linux for their servers, but it isn't ready, IMO, for most desktops."

One thing I've learned from reader input here at Small Business Trends is that significant numbers of small businesses are using Linux at the server level -- and they may not even know it. Small businesses rely on their technical gurus to choose the right server technology. All that business executives care about in that situation is whether the servers work properly for a reasonable price.

On the desktop, however, it is a completely different matter. There the advantages of using a software platform in common with the rest of the business world win out. Small businesses don't want to have to train employees on new software. Most have neither the time nor the technical skill to install new desktop applications, figure out how to maintain them, train their employees how to use them, deal with all the extra integration to make multiple applications work together, and still run their businesses.

UPDATE JULY 13, 2005: A reader emails stating that FireFox is more-or-less taking over the world. Certainly many more people are using FireFox these days. But a browser is a limited application and doesn't need training to use it. It's not the same as Word, for instance, in a law firm, where it is crucial that employees be power users of Word in order to rapidly turn out lengthy legal documents, or Excel in an accounting or consulting firm, where the professionals create complex, multi-tab spreadsheets for clients.

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Monday, July 11, 2005
Carnival of the Capitalists -- And Other Roundups
Carnival of the Capitalists, that online roundup of business blog posts, is being hosted this week at Multiple Mentality. One of my favorite posts in this week's Carnival is Sexy Advertising: Paris Hilton and the 3 tests over at the Retail Store Blog.

Be sure to check out the Blawg Review, a roundup of legal blog postings (get it? law + blog = "blawg") which is now being hosted at Legal Commentary. Don't miss My Shingle's post on law firm billing practices, describing profit markups by law firms that hire contract attorneys.

And finally, visit the Carnival of Personal Finance, being hosted this week at Smart Money Daily. Two must-read personal finance articles are Moving to Your Dream Job and How I Got my Dream Job, both of which are really stories about enterprising entrepreneurs.

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Sunday, July 10, 2005
PowerBlog Review: Joseph's Marketing Blog
Read all the PowerBlog ReviewsEditor's note: We are pleased to bring you the seventy-third in our regular weekly series of PowerBlog Reviews of business weblogs. This week's review is being guest-blogged by Martin Lindeskog. Martin Lindeskog has a Bachelor of Science degree in Business Administration from Southern New Hampshire University (2000). He graduated in May as an International Project Coordinator. Martin Lindeskog is seeking international job opportunities and is planning to start his own small business. He is a deputy member of the Swedish National Association of Purchasing and Logistics (Silf, Western Region).

By Martin Lindeskog

Joseph's Marketing Blog's tagline says "Rants of Marketing, Business, and Daily Life." Joseph DePalma started his blog in February by saying: "I'm probably going to turn this into somewhat of a business-experience blog." For being in his twenties, he has lots of business experience. I got curious about his different companies, so I sent him an e-mail and asked for an description of his ventures.
Here's some other information I can tell you: Vertora, Inc. is my main focus that everything sort of "falls back" to. It's a brand consultancy focusing on building amazing brand experiences (focusing on customer interaction, more so than graphic design and the like.)

AerialText, Inc. is a text message advertising firm that I'm currently selling. It's opt-in text message advertising. Currently there is no site for it because of this sale and how things are moving over.

Digital Charisma, is a web development firm I've had for years. it provides top notch web design and user experience - bottom line.

My favorite project, outside of brand experience consulting (which I absolutely love) is coming up. It's called OpenBeat - it's an internet radio center for independent music. Musicians will be able to sign up for a small annual fee, and we will promote their music on our 10 radio stations, give them a personalized artist website which we will also promote, and handle all payment processing for any CDs they wish to sell. It's a very exciting project, and we ran into some big delays with it, but it'll be going live in the next 2 months or so. Anyone will be able to go to the site and listen for free, and buy artist CDs right through our site. I can't wait till it's live. (E-mail, 07/09/05.)
From the About page: "In his spare time, Joseph writes this blog as a way to share his experience and knowledge." Joseph DePalma seems to be very good at managing his time, running all these different companies and at the same time being an active trader on the stock market. I bet he has read something by "productivity guru" David Allen. Joseph told me that he likes to read books. His favorite book is Good to Great by Jim Collins. I read Jim Collins's book, Built to Last: Successful Habits of Visionary Companies, in my Organizational Leadership course. Talking about leadership of an organization, I have to recommend the book, The Blackwell Handbook of Principles of Organizational Behavior, edited by Edwin A. Locke. I think that chapter 10 (Motivate Performance through Empowerment, pages 144-145) by Jay A. Conger, could be of special interest to Joseph DePalma and his readers. The author is listing Richard Branson of the Virgin Group, and Jack Welch of General Electric, as two positive examples on how empowerment works. See Joseph's reading list for books by Jack Welch and Richard Branson, and read his post, The Power of Empowerment.

The power of Joseph's Marketing Blog is the focus on how to build a better brand through customer experiences. I want to end this review with an excerpt from Joseph's post, Marketing is Life.

Marketing is not an afterthought. It should be integrated into the entire product or service right from the beginning. So many businesses focus on rushing to create a product or service, but never really think about the marketing behind it. (JosephDePalma.typepad.com, 05/16/05.)
Friday, July 08, 2005
When and Why Most SMBs Will Do Business in China
A McKinsey Quarterly article suggests that small and midsize manufacturing companies in Europe and North America are passing up opportunities in China:
"For many small and midsize enterprises in Europe and North America, the prospect of doing business in China can be daunting. In fact, as a result of their reluctance, such companies seem increasingly vulnerable on several fronts: they are not only forfeiting opportunities to sell goods and services in China and to source low-cost products in its factories and workshops but also face new Chinese competition at home.

But rather than wait passively for the day when these competitors show up on their doorstep, they can pursue strategies that could help them overcome the barriers to entering China's domestic and export markets. To be sure, those barriers are considerable. Many small and midsize companies are hardly eager to deploy scarce management resources to identify qualified Chinese vendors or to research and understand the tastes of the country's consumers. Nor do they have the time and resources to recruit staff and manage operations there."
So what is the right way for SMBs to go about capturing the China opportunity? The article notes that some businesses attempt partnerships with local Chinese companies, but these rarely work out. Rather, the author suggests that small businesses band together and/or pool resources, possibly through trade associations, to take advantage of opportunities to reach China as a market and/or to source manufacturing there.

I found this an interesting article, but the part about pursuing market opportunities (i.e., finding customers) in China strikes me as unrealistic. Precious few small businesses would be in a position to chase customers in China, even by pooling resources. Most small businesses have a tough enough time increasing their footprint in their own local markets. To attempt to go after markets half way around the world, with deep cultural and language differences, is a challenge most small businesses simply cannot overcome.

Sourcing of manufacturing, however, is a different matter. Small manufacturing companies in the West today are faced with compelling circumstances that make it imperative they have competitive cost structures. These days, competitive cost structures are hard to achieve with high-paid Western labor. Outsourcing of manufacturing in China can make sense.

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Thursday, July 07, 2005
Business Failure Rates Highest in First Two Years
New research from the U.S. Bureau of Labor Statistics suggests that most failures of American startups will occur in the first two years of their existence.

After that, the rate of business failure slows.

"The data show that, across sectors, 66 percent of new establishments were still in existence 2 years after their birth, and 44 percent were still in existence 4 years after. (See chart 1.) It is not surprising that most of the new establishments disappeared within the first 2 years after their birth, and then only a smaller percentage disappeared in the subsequent 2 years. These survival rates do not vary much by industry."
The following chart shows business survival rates by industry sector. Interestingly, the sector with the highest survival rates is education and health services. The sector with the lowest survival rates is the information industry. Of course, this study tracked new business startups from between March of 1998 and March of 2002 -- the height of the dot com boom.

Business Failures

Click to view larger image

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Wednesday, July 06, 2005
Boom Times for Irish Small Businesses
The Sunday Times has an interesting article noting that small businesses are booming in Ireland. The number of small businesses has doubled in the last 10 years, rising from 160,000 in 1995 to over 300,000 today.

The pattern of entrepreneurship in Ireland is similar to the pattern in other well-developed countries with vibrant economies, such as the United States. Some of the key characteristics of the SME (small and medium enterprise) sector in Ireland include:
  • The number of manufacturing businesses is low. Instead, the trend is to import and distribute goods that have been sourced in low cost economies.

  • Freed from capital intensive manufacturing, firms have more time and money for research into creating new and better products.

  • The business services sector is booming, in part because Ireland has become a prime location to outsource services to.

  • Construction is thriving, and craftspeople and tradespeople are finding opportunity.
And all the new-found wealth and prosperity in Ireland is creating an affluent consumer culture. It is sparking a chain reaction, leading to further new business opportunities. Consider the implications of this quote from the article:
"Delaney said changing lifestyles and increased wealth have created new business opportunities. 'People see ideas all around them and create a new market for something which was lying idle,' he said, adding that garden centres and DIY shops have mushroomed as more people socialise at home and use their garden as an extension of the living area. 'It's an area where there's a lot of innovation and product development,' said Delaney. 'In the past, we wouldn't have thought of having outside gas lights on a decking because nobody would have put decking down.'"
Read the whole article.

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Tuesday, July 05, 2005
Cost of Starting Up is Lower than Ever
Joe Kraus, founder and CEO of JotSpot, writes that it's a great time to be an entrepreneur because it's never been cheaper to launch a company.

He points out that Excite.com took $3 million to get launched, but that JotSpot took only $100,000. He attributes the cost differential to four factors:
  • Hardware is cheaper;

  • Infrastructure software is free;

  • Access to global labor markets means inexpensive access to talent;

  • Search engine marketing lets you affordably reach small markets.
While his thoughts primarily describe Web technology startups, it's not hard to see how his thoughts would apply to other kinds of businesses.

And what are the implications? He suggests we can expect more people to be entrepreneurs (since more people can raise $100,000 than $3 million). He also suggests we will see more companies "bootstrapping to profitability."

Be sure to check out the whole post, including the comments and and other posts linking to it.

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Sunday, July 03, 2005
PowerBlog Review: Innovation.net
Read all the PowerBlog ReviewsEditor's note: We are pleased to bring you the seventy-second 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

The Innovation.net blog's tagline says "it's all about collaborative innovation."

Innovation.net is the brainchild of Mike Docherty. He began blogging a little over a year ago in order to learn about blogging. He says, "I wanted to learn about blogging and had lots of ideas and observations on managing innovation from my 24 years in general management, marketing and new product development. I want to help my readers draw deeper insights and knowledge from what they see and experience related to innovation and entrepreneurship."

Mike is CEO of Venture2, Inc, a consulting and new ventures management company focused on launching breakthrough innovation in the consumer products industry. He blogs from Delray Beach, Florida, USA.

Mike's postings vary in length, which is a nice way to mix things up. For example, Mike's May 5, 2005, posting is only two short paragraphs. A posting that ran a couple of months prior ran 10 paragraphs.

Mike also mixes things up with a different technique. He intermingles artwork with his postings. Sometimes it's a photo, other times it's line art. And it always relates to the content of that particular posting.

Here's something I like very much about Mike's blog. He includes interviews.
One such interview was with the CEO of a company called Eureka Medical, about Eureka's business model and philosophies on medical innovation. The interview is excellent because it asks a question and allows the interviewee to delve into the answer in depth. Because the interview with the CEO covered a lot of territory, Mike wisely broke it up into a series of three interview postings. And he didn't run them as three consecutive postings, but instead over a period of three weeks. This technique can keep readers interested in coming back.

About 15 years ago, business books became red-hot "must reads," and the trend continues. Because we want to be successful in business, we scoop them up by the dozens. They typically have catchy titles (who can ever forget "Winning By Intimidation" and "Who Moved My Cheese"?) and concepts (Be a 60-second Manager!). I don't know about you, but I've bought some of these tomes, only to read them and think "Where's the beef?" It would be good to know which ones are truly worth reading because, let's face it, time is precious for us all.

Mike read one such book -- Blue Ocean Strategy -- and then reviewed it in a posting:
"I've read other reviews, and they seem generally very positive. Sorry, but I can't help but feel that this book's premise is a metaphor in search of an idea. Maybe I didn't get that 'I can change the world' feeling, however short-lived it may be, that I get from reading other innovation visionaries I respect and read. However, I wouldn't recommend this one."
Mike just saved his readers -- those lucky souls who hadn't yet shelled out 30 bucks to buy the book -- money and time.

One of the key characteristics about this blog is the way it gives an in-depth and high-level look at consumer product innovation. This is a blog intended for senior-level decisionmakers. This is not a "tips" kind of blog. Rather, it is a strategy blog.

Visit Innovation.net.
Saturday, July 02, 2005
Issues Small Businesses Face in International Trade
As more small businesses start to do business globally, what are the issues they face?

Dr. Jeffrey Cornwall of The Entrepreneurial Mind offers some interesting, real-life insights about the challenges small businesses today face when doing business globally. He summarizes points made by Ian Levitt, owner of an automotive parts distribution business called Qualcast, during the recent International Small Business Council convention chaired by Dr. Cornwall:
  • Credit risk. As he began to do business in China, he faced the need to finance large purchases by Chinese customers. He would have to carry their debt until the parts arrived and were weighed and checked. This could mean several weeks to months. Unfortunately, banks view lines of credit on such accounts receivable as too risky to finance even if only for a few weeks. He was able to speed the process along, but had to tie up all of his cash on a single order.

  • Currency issues. More of his European customers now do business in Euros rather than dollars. This opened him up to significant currency exchange risks. Even as a small business person, he was able to buy a large stake in Euros for twelve months to stabilize his exchange rate.

  • Credit card fraud. Sadly, credit card fraud is a major issue for international trade, and many clients insist on using credit cards for purchases. Ian said that he can no longer accept credit card orders from his international clients due to the high rate of fraud.
Friday, July 01, 2005
Japan Poised for Entrepreneurial Ventures to Break Out
The latest edition of the Japan Entrepreneur report asserts that the time is ripe for Japan's entrepreneurial ventures to break out, due to conditions similar to post-World War II era in Japan, and the early 1980's in the United States:

"Social reform, technological innovation and strong needs for entrepreneurship converged, sparking an unprecedented venture boom.

These same three factors converged in the United States in the early 1980s. The U.S. had suffered from inflation for ten years, unemployment had topped ten percent and the nation needed new industries. Improved semiconductor technologies, the first personal computers and President Reagan's broad deregulation measures combined to create a powerful wave of innovation. That wave launched a host of world-leading IT players: Microsoft, Apple Computer and Cisco Systems, to name just a few.

Today's Japan resembles the U.S. of the early 1980s. The nation needs entrepreneurship as IT players like Sony and Fujitsu fail to generate earnings, creating pressure to restructure. Problems erupt from industry giants like Seibu Railways and Daiei. Add in Commercial Code revisions and deregulation and you have a potent mix transforming the economy.

From a technology standpoint, too, Japan is witnessing a dramatic transformation. The IT industry's center of gravity is shifting from general-purpose computers to a new breed of digital consumer devices: computers that don't look like computers.

Ten years ago big players dominated Japan's promising new technologies, but today these giants are hard-pressed to survive. Ventures enjoy unprecedented opportunity as these entrenched interests lose their grip. Once again, three crucial factors--social reform, technological innovation and the need for entrepreneurship--are aligned."
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