Home | TrendTracker | PowerBlog Reviews | The Experts | Newsletter
SMALL BUSINESS TRENDS brings you daily updates on trends that influence the global small business market.
Anita Campbell, Editor
Past life: CEO, corporate executive, tech entrepreneur, retailer, general counsel, marketer, HR ... (more)
email me
free business magazines
Trade publications FREE to qualified professionals. No hidden offers and no purchase necessary.
On Wall Street
The Deal
Computing Canada
Employee Benefit
Oracle Magazine
100+ additional titles. Click to browse.
Previous Small Business Trends articles can be found at the links below:
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
Or, use the search box below to find a
specific post:

Sign up for our FREE Small Business Trends newsletter. (View Current)

We publish regularly and promise we won't share your email address with anyone. (Privacy Policy)
* Don’t have time to read several dozen blogs a day? Pick two or three. Your brain will thank you for it.

Small Business Trends Radio
Tuesdays, 1:00 PM Eastern U.S. time
on Voice America network
Click to listen

November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Tuesday, December 30, 2003
Hot Documentary Film Trend: Serial Killers
Apparently there isn't much money in documentary films these days -- except when they are about serial killers.

"America as a whole is utterly fascinated with serial killers," says Julian P. Hobbs, director of Collectors, a documentary film about two guys obsessed with serial killers. Read more here.

That understanding of the market demand is partly what's driving all the film attention being given to serial killer Aileen Wuornos. A newly-released Hollywood film "Monster" starring Charlize Theron, as well as two documentaries are based on Wuornos' life. Listen to the audio report on NPR here.

Small, independent, documentary film makers have found what seems to be one area where they can make money: following the lives of serial killers (and even their groupies).

Monday, December 29, 2003
Top Small Business Software in 2003
From the folks over at Small Business Computing comes this list of the top 10 software products for small business during 2003 (all prices in US dollars):

10. Google Toolbar and Deskbar - The free toolbar gives all-the-time access to Google, the Web's most extensive search engine. With the toolbar you can see the page rank for the site being surfed. It also includes a pop-up blocker and a highlighting tool to highlight your search term right on the page -- and lots more. The deskbar is a small window that pops up when you want to search the Internet and don't want to launch an Internet Explorer browser window.

9. System Mechanic 4 Professional - During 2003 Iolo Technologies added Panda anti-virus and firewall software to its $70 system optimization and housekeeping package. The combination offers an alternative to Symantec's SystemWorks, Personal Firewall and other utilities.

8. Jasc Paint Shop Pro 8 - This digital photography and image editing software offers a $109 alternative to Adobe's $649 Photoshop.

7. Intelligent Spam Filters - This category refers to a new breed of spam filters that perform intelligent, on-the-fly content analysis. This new type of spam killer includes Outlook add-ons such as InBoxer, to freeware programs like spamihilator.

6. Adobe Photoshop Album - The $50 Photoshop Album offers an easy, friendly way to organize, search, touch up, print or e-mail your collection of digital images.

5. Dragon NaturallySpeaking 7 Preferred - Version 7 of this pioneering speech-recognition package is called "simply remarkable" by Small Business Computing. It costs $200 and with just a half an hour's setup, "you can truly dictate to your PC, rattling on in your normal voice and enjoying versatile shortcut commands.... If Microsoft bought this software, Time and Newsweek would be running cover stories about a new millennium in human/computer interfaces. It's that good."

4. Microsoft Windows XP Media Center Edition 2004 - Microsoft's second-generation operating system for multimedia-optimized computers. It's a "classy, attractive way to manage your digital photos, music files, TV and radio favorites, and more."

3. Activewords - The $50 ActiveWords Plus is an interface that reacts when you type words on the keyboard. ActiveWords is "an exemplary power tool for quickly performing repetitive tasks, launching favorite programs or Web pages, and applying the idea behind Word's AutoComplete to customize and optimize your whole computing environment."

2. OpenOffice.org 1.1 - OpenOffice is a free, open-source, Microsoft-file-compatible word processor, spreadsheet, presentation, and drawing suite. Interchanges for Word, Excel, and PowerPoint, along with a PDF export and a macro recorder are also included.

1. Microsoft Office 2003 - "It's somewhat anticlimactic or obvious, but it'd be foolish to deny that the new editions of Gates & Co.'s ultra-dominant software suite are the most significant of the year. *** ...Outlook 2003's reorganized reading layout and built-in spam blocker, as well as the Small Business Edition's impressive (but unshareable or single-user) contact manager, are a real help to end users...."

Read the full text of the article here.

Although the article is directed toward small business, the top ten choices are equally applicable to home users and even large corporations. And it's clear that Microsoft still rules -- yet interesting that the runner-up for top software choice is an open-source entry.

Sunday, December 28, 2003
Flaws in Italy's Small Business Sector
The collapse of the Parmalat food giant in Italy has revealed a flaw in the Italian system: the lack of effective financial control over its family-owned companies.

Parmalat is not a small business. But it is a family-owned company that started out as a small business and then grew large. The issues facing Parmalat are the same kinds of issues facing Italy's small business sector, just on a larger scale.

According to a report by Agence France Presse, Italy's small business sector depends largely on a system of trust. That system of trust was rocked when it was discovered two weeks ago that Parmalat was relying on a 4.9 billion Euro bank account that did not exist. Banks refused to advance any more cash when the account could not be verified. Then, in a scenario reminiscent of Enron, Parmalat quickly collapsed.

Since then, former officers and directors of Parmalat have revealed a fraud at least twice the size of what was originally suspected. And they have revealed a web of fraudulent transfers of company money into private, offshore bank accounts owned by the controlling Tanzi family. The company is now insolvent.

All of which raises questions about the health of Italy's small businesses. The Italian weekly magazine Panorama asks how many small companies are out there like Parmalat?

As a result of Parmalat's failure, Italy's trusting way of doing business will come under intense scrutiny and likely result in reforms. The fallout will impact Italy's small business sector. Among the most likely impacts: funding sources for Italy's small businesses will become more restrictive; there will be greater regulatory oversight; and, of course, many small businesses, including the dairy farmers who supplied Parmalat, will never recover the money they are owed by Parmalat.
Friday, December 26, 2003
Employee Tracking Is Coming to Cell Phones
Ever wonder where one of your salespeople was -- actually making a call or headed for the golf course? Well, for better or worse, soon you will probably be able to tell. There is a big-brother aspect to the whole affair, but the ability to monitor where employees carrying cell phones are and whether they are moving or sitting is on the way.

GPS technology is being built into cell phones in response to the U.S. government's requirement that by late 2005 wireless carriers have the capability to locate callers who automatically dial 911.

The impact on businesses should prove interesting. Yes, knowing where a salesperson, repair tech, or other time-value employee can be found is tempting. But are you willing to deal with the ramifications regarding privacy and morale? Will you need to establish policies? And if your best salesperson regularly violates those policies, then what do you do?
Thursday, December 25, 2003
Top 10 Healthcare Predictions for 2004
Forrester is out with its top ten healthcare predictions for 2004. In order, they are:

1. Pharmaceutical companies will downsize.

2. More U.S. health plans will outsource claims processing, and it goes offshore.

3. Revenue derived from Electronic Medical Records (EMR) will surge past that from Practice Management Systems (PMS).

4. Pharmaceutical firms will begin providing product detailing via the Internet to nurse practitioners and physician assistants.

5. Enrollment in consumer-directed health plans will double.

6. Proscape will see a fourfold increase in use of its tablet PCs by pharmaceutical salespeople.

7. One-sixth of all U.S. households will purchase prescription drugs online.

8. Health plans will implement natural language search tools on their websites making it far easier for the average Joe and Joan to use them.

9. Health plans will take advantage of real-time copay connections to help manage individual patient care by providing real-time treatment recomendations based on patient records.

10. The growth in Electronic Data Capture (EDC) for clinical trials will slow to a trickle as skeptical managers await results of early adopters before committing.

It's unlikely Forrester will be dead on for all ten points, but if they are right about 3, 6, and 10, a good many smaller enterprises will feel the effect. EMR has the potential to have a big impact on the two-thirds of U.S. physicians who are in small group practices. Proscape sells its products to all sales people and dominance in pharmaceuticals will influence other industries. A number of smaller tech ventures are betting their future on EDC, and delays of a year of more could prove really painful.
Tuesday, December 23, 2003
In-Shore Outsourcing
As an alternative to offshore outsourcing, some U.S. companies are choosing in-shore outsourcing instead.

American companies challenged to cut costs are now outsourcing to cities within the U.S. where labor costs are lower than the national average.

Among the cities where salaries are below average are: Little Rock, Arkansas; Birmingham, Alabama; Asheville, North Carolina; Albuquerque, New Mexico; and Omaha, Nebraska. Source: Mercer Human Resource Consulting.

If you simply looked at hourly rates alone, companies could save more by outsourcing overseas. Offshore hourly rates can be one-fourth the rates (sometimes less) of similar talent in the United States.

With in-shore outsourcing, however, companies feel they get the best of both worlds. They still can receive cost reductions, albeit less dramatic. But having a labor source located in the United States gives them better control over quality and communications -- something they believe offsets the smaller cost reductions.

Tech companies in particular can take advantage of this trend, also being called by some companies "best shoring."

Wall Street Journal subscribers, read more in the article by Kris Maher.

In-shore outsourcing has been a common practice among some large corporations. They've always looked at labor micromarkets within the United States and chosen to locate operations where labor costs are low. But the growth in offshore outsourcing has brought about significant market pricing pressure for tech and call center companies. This in turn forces more companies, including smaller businesses, to look at the in-shore alternative in order to reduce costs. Especially if they do not feel comfortable with offshoring.
Monday, December 22, 2003
China to Guarantee Property Rights
China is changing its constitution to guarantee property rights for individuals and businesses.

China's entrepreneurs have been lobbying for the change. The change will bring China's legal system in line with the emerging economic behavior occurring in that country.

Already millions of Chinese have started businesses, purchased homes, and bought stocks in Chinese businesses. Individuals already own property -- they now want it to be legally protected.

Read the article here for more background information. Tip of the hat to Eric Olsen at Blogcritics.org for raising this article.

A guarantee of private property rights will foster even more business startups and small entrepreneurial enterprises in China. And due to the trend toward globalization, a ripple effect will be felt in the United States and western countries. Import/export activity will grow. Foreign investment in China, and foreign sourcing of goods and services from China, will certainly increase as businesses expand with confidence knowing their investments are better protected.

Sunday, December 21, 2003
Biotech Startups Not Getting SBIR Grants
Biotech industry organizations are lobbying the U.S. Small Business Administration to loosen up its interpretation of Small Business Innovation Research (SBIR) grant rules.

The rules say grants can only be awarded to businesses that are 51 percent or more owned by one individual or individuals who are American citizens. This precludes many biotech firms whose majority owners are venture capital firms from receiving SBIR grants.

The biotech organizations claim the SBA recently became stricter in its interpretation. The SBA says the rules are 21 years old and nothing has changed. However, SBA officials admit that in the past some grants were improperly awarded due to "misunderstanding" of the rules.

Read more about biotech's flap over SBIR grants here and here.

Some of the most promising biotech firms, especially biopharmaceutical firms developing new drugs, are backed by venture capital. That's because the cost of completing product development and clinical trials is expensive. Institutional venture funding is often times the only way these companies can get off the ground and make it through to successful FDA approval. But if the SBA sticks to its strict interpretation of the rules, there won't be any SBIR grants for startups whose ownership is primarily in the hands of venture capital interests. This may limit the benefits of the SBIR grant program for biotechs and particularly biopharms.
Saturday, December 20, 2003
More Small Companies May Stay Private
The cost and complexity of complying with the Sarbanes-Oxley Act may keep more U.S. small companies private. Entrepreneurs who might have gone public in past years are staying away from IPOs.

As the deadline for complying with the financial reporting segments of Sarbanes-Oxley draws near, small and medium-sized public companies are finding themselves disproportionately impacted compared to their larger counterparts.

A massive effort is required by a company in order to comply. Many small and medium-sized companies just don't have the resources.

Small tech companies especially are challenged by compliance. They must divert cash from critical research and development and instead put it into compliance reporting.

Under Sarbanes-Oxley, publicly held companies must document their internal financial controls. That requires setting up sophisticated internal compliance systems.

It is estimated that the initial cost of setting up compliance systems runs several hundred thousand dollars (US). After that it will cost an extra $50,000 in legal and accounting fees annually. Also, the costs of setting up independent Boards (required by Sarbanes-Oxley) and finding and insuring Directors has risen significantly. These costs could easily reduce a small company's profits by 15%, some say.

For more on this subject, read:
Keeping Small Business Off the Street
Sarbanes-Oxley Burdens Small Companies

Because of Sarbanes-Oxley it is now a lot more expensive to be a public company. Many small businesses simply won't be able to afford it. That means they will have to find alternate sources of capital for business expansion -- other than the stock market.
Friday, December 19, 2003
Top Ten for Small Business in 2003
The Small Business Survival Council (SBSC) has named its list of the year's Top Ten positive developments for small businesses in the United States. The SBSC makes the case that during 2003 small businesses in the U.S. experienced:

1. Tax Cuts. The SBSC notes that 91% of small businesses pay personal tax rates rather than corporate ones, due to the type of business structure they have. Therefore, 2003's cuts in personal tax rates provided direct relief for the nation's millions of small businesses.

2. Faster Economic Growth. This came as a result of the tax cuts, which spur profits and business opportunities.

3. Job Creation on the Rise. The SBSC points out that when self-employed business owners are fully counted, the number of Americans employed reached an all-time high in November, at 138.6 Million. Jobless recovery? Not according to the SBSC (a view that is shared by several other prominent commentators including writers for Economy.com and the Wall Street Journal, as we have noted before in previous posts).

4. Health Savings Accounts (HSAs). Changes in Health Savings Account rules passed as part of the Medicare bill make HSAs more available for small business owners and employees.

5. Free Trade Accords. Free international trade expands opportunities for small, dynamic U.S. businesses. The SBSC points out that 97% of exporters are small businesses.

6. Repeal of Steel Tariffs. President Bush eliminated steel tariffs that had raised costs for small and medium-sized U.S. companies that use steel, and had destroyed tens of thousands of jobs.

7. Robust Stock Market. The stock market has had a good year in 2003, translating into good news for the pensions and portfolios of small business owners and employees.

8. Low Interest Rates. Prime rate for businesses fell to 4% in July, the lowest since 1959.

9. Defeating Costly, Misguided Climate Measures. Several environmental/climatic measures were defeated. The SBSC points out that the climate science behind the measures was dubious, energy costs would skyrocket and economic growth would slow.

10. Winning the War. The toppling of Hussein in Iraq and the capture of terrorists has provided greater security for businesses.

Read the full text of the Top Ten list here.

The Small Business Survival Council is a conservative lobbying group working on behalf of small business. Its views may not be those that everyone agrees with. Nonetheless, the SBSC is one of the more visible and influential of the small business advocacy groups. And it's clear this group believes 2003 was a good year for small business legislative and economic policy in the U.S.

Thursday, December 18, 2003
Picture Phones -- Part Two
Yesterday I posted an entry pointing out the growing use of camera phones by small business. Here is another article illustrating innovative uses of camera phones by businesses: The Year in Picturephones.

The article, citing sources at Picturephoning.com, provides the following examples:
    People have been taking pictures of washing machines or plumbing fixtures that need repairing, then sending them off to the repairman so he'll bring the right parts.
    Real estate agents are using them to send pictures of homes to prospective buyers, giving the realtor a speedy edge in a competitive market.
    A contractor in the business of sealing driveways, has been taking pictures of any pre-existing tar splatters on a customer's garage or house. "Just so if a customer asks, I can say, "Here, look, that was there before I started."
    A company, RealSafe.net Network , is suggesting real estate agents user their camera phones - not to shoot property - but to snap pictures of their clients (with their permission), as a form of insurance and stored in a secure database, which can only be accessed by court order.
    At a Welsh hospital, senior doctors are allowing interns to send them pictures of an x-ray, thanks to pioneering mobile phone technology, speeding up the diagnosis and suggested treatment process.
Sounds like the imagination is the limit for business uses of camera phones. Expect the demand by businesses for camera phones to grow.
Wharton Faculty Predict Improved Business Outlook for 2004
After a slow and confusing economic recovery, 2004 will be a year of solid improvement building on positive news, including the capture of Saddam Hussein, at the close of 2003. New technology and changing public policy as the United States faces another presidential election will also shape the business world in the coming year, predict faculty of the Wharton School of the University of Pennsylvania.

Wharton finance professor Jeremy Siegel suggests that GDP will rise 3-4% adjusted for inflation, and unemployment will decline as new job growth begins to take off. The Dow Jones Industrial Average will trade in a range of 9,000 to 12,000 during the year and is likely to close between 10,500 and 11,000, he predicts.

Richard Herring, co-director of Wharton's Financial Institutions Center, says that while the Federal Reserve has indicated the economy faces an equal risk of deflation and inflation, he finds inflation the more likely scenario. The global economy may be about to head into an expansionary period, which would drive up prices for commodities and other goods.

Herring feels that U.S. interest rates may rise if investors grow concerned about large government deficits, or if a declining dollar leads to massive repatriation of foreign investment. However, he says, that does not seem to be an immediate threat.

According to W. Bruce Allen, professor of business and public policy at Wharton, an improved economy will boost the fortunes of the airline industry, which has been in a slump driven by the economic slowdown and the terror attacks of Sept. 11, 2001. The key question facing the industry is whether big carriers such as United, Delta, and American, will be nimble enough to benefit from the up-tick. During the recent downturn smaller regional airlines, including Jet Blue, Southwest, Air Tran, and Frontier, have been picking up market share in cities where they operate. "Now that people are comfortable with the new carriers, will they go back to the old carriers?" asks Allen.

In telecommunications, Voice over Internet Protocol (VoIP), which allows consumers to make telephone calls over the Internet, will grow in importance early in the new year, predicts Gerald Faulhaber, Wharton professor of business and public policy.

Healthcare has been dominated in the past year by the debate over legislation that extends drug coverage to Medicare recipients for the first time since the government-funded health system for the elderly and disabled was created 40 years ago. After all the discussion, the only impact of the bill in 2004 may be enhanced payments to Medicare managed-care providers and a discount card that gives recipients reduced prices on out-of-pocket drug costs, suggests Mark Pauly, Wharton professor of healthcare systems.

Overall health spending, which topped $1.4 trillion in 2001, the last year for which official figures are available, will continue to outpace inflation at a real rate of 5-7%, Pauly forecasts. Drug spending, which had been driving the rise in health care costs in recent years, may drop off in 2004 as the industry loses patent protection on some key blockbuster therapies. The rate of increase in health care premiums is also likely to slow.

More on Wharton's 2004 predictions.
Effective Marketing Approaches Vary for Minority Groups
Businesses should use differing media and approaches to reach targeted minority audiences in marketing efforts according to Forrester Research Inc. Advertising-media technology and message-effectiveness trends continue to develop differently for different ethnic and racial groups. A mail survey of 54,817 U.S. households has identified key trends in technology adoption, media consumption, and receptiveness to marketing among Asians, Blacks, English-speaking Hispanics, and Whites.

"Marketers should take note. Understanding the differences among each group is critical to developing effective marketing campaigns," said Jed Kolko, principal analyst at Forrester. "Our survey results show that there is more to reaching minorities than understanding demographic differences. Income, for instance, does not necessarily determine what technology someone invests in and what influences them to purchase it."

When it comes to device ownership, 15% of Blacks say that they are likely to buy a desktop computer in the next year, compared with 7% of Whites, 11% of Asians, and 11% of Hispanics. Hispanics are more likely to purchase entertainment-based devices like MP3 players, video game consoles, and digital video camcorders, even though they earn $16,100 less than Whites.

Online access remains unbalanced because of income and education differences among races. Forty-two percent of Blacks and 57% of Hispanics are online, compared with 67% of Whites and 79% of Asians.

Asians, Blacks, and Hispanics are more likely to rate personalization and ad relevance as important features of online content sites. Blacks and Hispanics find advertising more entertaining and trustworthy than others do and are more likely to watch TV commercials – 54% of Blacks and 42% of Hispanics say they watch TV ads, compared with only 32% of Whites. Blacks are twice as likely as Hispanics and Whites to purchase a product because the company sponsors family or educational programming.

More information on reaching minorities.
Advertising Set to Rebound
ZenithOptimedia reports that the global economy in 2004 seems likely to grow at or faster than its long-term growth rate for the first time since 2000. The media services agency cites the London-based global bank HSBC as forecasting real growth of 2.7% in 2004. Because advertising expenditures rise faster than the wider economy in an upturn, ZenithOptimedia is projecting North American advertising spending to top $154.2 billion this year and grow to $176 billion by 2006.

The U.S. advertising marketplace has performed strongly in 2003. Total ad spending across 11 measured media for the first half of 2003 is 7% higher than the same period a year ago. The U.S. will continue to account for over 45% of global ad expenditure 2004-2006, and improved U.S. corporate profitability is cited as the most important recent development to support an advertising recovery.

The U.S.'s largest advertisers are driving this growth, with a combined spending increase of 16%. The current financial picture for most of these companies is generally good, indicating a strong 2004.

The top U.S. advertisers have bested their second quarter earnings estimates by an average of 10%. The top ten U.S. advertisers are.
More information on projected advertising spending.
Wednesday, December 17, 2003
Small Businesses Adopting Picture Phones
Camera phones are one of the fastest-growing segments of the overall mobile phone market, a trend that is expected to accelerate. And small businesses -- usually slower to adopt new technologies -- are part of the picture phone growth trend.

An article in Small Business Computing reports that according to In-Stat/MDR, in 2002 the worldwide shipments of camera phones totaled approximately 18.2 million units. However, in just the first three months of 2003 alone, 7.8 million units were shipped.

What's interesting are the new uses that some small businesses are finding for camera phones. Small businesses are revolutionizing and streamlining their everyday business processes as a result of using camera phones.

Camera phones are being used for quality control, field diagnostics and troubleshooting, even project completion certifications. How?

In the case of field diagnostics and troubleshooting, an employee uses a camera phone to snap a shot of a diseased plant for a plantscaping company. The picture allows a long-distance diagnosis to be made on the spot. Prior to using a camera phone, a supervisor would have had to be dispatched or samples of the blighted plant taken and returned to a central lab for diagnosis, with significant time delays or extra cost.

In the case of project completion certificates, a painting company crew takes a photo of a building immediately after the building was painted, to prove the project is complete.

Small Businesses Change Banks More Often
A study by NFO Financial Services conducted earlier this year showed that small business owners are changing financial services providers at the fastest rate in years. The study points to Internet rate shopping and the similarity of product offerings as drivers of this trend.

Business owners switching financial institutions for at least one product or service totaled 8%, an increase of more than 20% year over year.

The top ten financial institutions providing services to small businesses ranked by loyalty of their customers were.

Read more about survey of small business loyalty and financial institutions.
Tuesday, December 16, 2003
Email Marketing Still Strong for Small Business
Despite an unprecedented increase in spam during 2003, email marketing has remained an effective way to reach existing customers and contacts.

According to the 2003 DoubleClick Email Trend Report, legitimate marketers continue to get strong performance from email. Indeed, performance has for the most part increased over last year.

According to the Report, on average 88% of emails are delivered to the intended recipients. About 37.2% of those who receive the message actually open it. And of those who open the email, 9.2% on average click through the links to the underlying marketing messages or offers.

These figures can vary significantly depending on the type of product/service being promoted:

  • Business Products and Services emails have the highest open rates, with 46.3% of the recipients opening the messages. But the click rates are lower than average, at 7.8%.

  • Consumer Products and Services, on the other hand, have fewer people opening the messages, at 39.6%. However, they have the highest click-through rate, at 11.2%.

  • Download the 2003 Email Trend Report here.

    Email marketing remains a valuable tool for legitimate marketers, despite spam. And, because it is inexpensive, email marketing can be used by businesses of any size, large or small. Rumors of its death were greatly exaggerated.
    Monday, December 15, 2003
    Businesses That Don't Explain Price Increases Will Be Penalized for Them
    In a Gallup Poll conducted earlier this year of feelings about business sectors in the United States, the three sectors with the highest positive ratings were computer industry (70%), restaurant industry (66%), and grocery industry (63%).

    The sectors with the worst negative ratings were healthcare (45%), oil and gas (43%) and legal and pharmaceuticals, both (38%).

    An NBC News/Wall Street Journal poll conducted the previous year by the Peter Hart and Robert Teeter polling organizations asked people to identify the least justified price hikes in areas that had undergone substantial price increases in the past couple of years. The increases respondents felt were hardest to justify were prescription drugs, healthcare, and oil and gasoline.

    That's a pretty good correlation between two separate polls. What it tells me is that those industries have done a poor job explaining the reasons for their price increases. Sounds like bad customer relationship management to me.

    If your business functions in one of those three areas, what have you done to prepare your customers for price increases? All the trend lines show those prices will continue to rise. Are you educating your customers, or are you going to be regarded as a gouger?

    No one likes to pay higher prices, but they are easier to accept when the businesses charging them warn customers and show what is being done to hold costs down. Knowing something is coming gives you a chance to prepare for it. If you're in a business where you know price increases are coming and you don't make the most of the opportunity to prepare your customers, you deserve their negative feelings.

    To get a look at some of the results of those two polls and others go to Polling Report.
    Sunday, December 14, 2003
    Selling the Experience Not Just the Product
    The Little Engine That Could is the greatest marketing book ever written according to Stuart Avery Gold, COO of Republic of Tea and author of Dragon Spirit: How to Self-Market Your Dream. For Gold, success and accomplishment are about how much you believe you can do something. Just like that Little Engine, if you think you can, you can.

    Emarketer.com's David Berkowitz interviews Gold on the subject of how to follow your dreams in business. Gold makes a distinction between an entrepreneur, a person who creates a business, and a zentrepreneur, a person who creates a business and a life. For Gold, it is impossible to reach any level of success unless you love what you do and believe in your ability to do it. It's about passion.

    Gold and Ron Rubin, CEO of Republic of Tea, took a 5,000-year-old beverage and brewed a successful business and way of life from it by following their passion. They created the Republic to foster, a "Tea Revolution that will enrich the lives of our Citizens through the Sip by Sip life -- a life of health, balance and well-being."

    Clever packaging of their product, website, and philosophy has helped make the little Republic of Tea canisters hop off shelves of upscale shops.

    At the Republic, they stress the importance of responding to the less tangible needs of employees and customers. They see themselves as part of the developing trend of selling an experience along with a product. For Gold and Rubin, the experience is at least as important as the actual hard product.

    Read the entire interview with Stuart Avery Gold in which he talks about how to successfully take a business to market without spending big bucks on marketing and advertising, or visit the Republic of Tea.
    Saturday, December 13, 2003
    Canada's Small Businesses Key to Jobs Program
    Canada's federal government and an aboriginal group are forming a program to help unemployed aboriginal Canadians find jobs in small businesses.

    An article in the Business Edge refers to small business as Canada's largest employer, with a hidden job market. These small businesses often don't have the time nor the resources to look for employees.

    Likewise, aboriginal Canadians frequently don't know where to look for work.

    The new program, called Enterprise-based Employment for Aboriginal People (E-BEAP), is designed to link up the two groups. The program is expected to help up to 10,000 aboriginal Canadians find jobs.

    Implicit in this news report is an indication of just how important small business has become to Canada's economy and employment picture.
    Friday, December 12, 2003
    Marketing Execs Target 2004 Spending
    Fifty percent of U.S. marketing executives expect to increase spending on seminars and events in 2004. Forty-eight percent plan on increasing electronic advertising. Forty percent will increase online marketing, and 29% plan on spending more on keyword search engine buys. That's according to a survey of 125 marketing executives conducted in November 2003 by Patrick Marketing Group. The biggest planned decrease in spending was for print advertising (20%) and trade shows (18%).

    While over three-quarters of those responding to the survey said that the economy remains weak, a majority said a recovery was imminent. More than a third labeled the economy "very weak" with spending down markedly in their sector and said that it was hurting them significantly.

    Twenty-seven percent said the economy was making it harder to sell high-value products and services, pricing was under pressure, and their market was commoditizing. As a result they see a need to reposition their products and services in an effort to offer more value to customers and in an effort to maintain price levels.

    A Change in U.S. Patent Direction?
    The Director of the U.S. Patent and Trademark Office, James Rogan, is stepping down. This news was greeted positively in many quarters, including by some folks over at Marketing Wonk who had this to say:
      His two-year tenure marked a high-point in patent office whimsy, allowing for many process patents that enabled Internet companies and others to legally prevent other people from using what many would consider obvious non-innovations. In stepping down, he said he would like to work on his autobiography (may we suggest "I Can't Believe They Granted It"), which will surely be available via one-click shopping at, well, just at Amazon.com.
    A growing number of corporate and government officials is warning that the U.S. patent system is broken, threatening to stunt technological innovation. They claim that the Patent Office is approving overly broad patents for software and Internet technologies, jeopardizing the viability of the Internet. MSNBC writes this:
      Critics hope that the impending departure of [patent office] Director James E. Rogan...might lead to consideration of a new approach.

      Overall, the number of patents has nearly doubled since 1990, fueled in large measure by the high-tech boom. The patent office now has a backlog of 450,000 applications pending for all types of inventions; software and Internet-related patents account for more than 15 percent of all patents granted. In recent months, several of those patents have spawned court disputes, involving such high-profile technology as Microsoft Corp.'s Internet browser, the BlackBerry e-mail device, and eBay Inc.'s online shopping system.

      In a lengthy report released in October, the Federal Trade Commission bluntly questioned the rapid proliferation of patents, especially those covering high-technology advances.
    Overly broad patents hurt businesses of all sizes, especially small businesses. Overly broad patents increase the costs of doing business and impede online commerce. Small businesses are forced into added expense when they (a) have to change technologies upon discovering that a technology is subject to a patent, or (b) are forced to pay royalties -- even if they and millions of others have been using the technology for years.
    Thursday, December 11, 2003
    Content Resource for Small Business
    The James J. Hill Reference Library is positioning itself as THE reference library for small businesses in need of industry and business information.

    The "JJ Hill," as it's called, is located in Saint Paul, Minnesota, USA. According to its website it has a "world-class collection of practical business information resources and is considered one of the most comprehensive business libraries in the country."

    The JJ Hill has created a unique business model that allows a small businessperson to perform research, sitting in front of a computer, and have access to the library's considerable resources, without leaving the office. A subscription is required to use the JJ Hill's service, yet another example of the increasing trend toward paid business content on the Internet.

    This post was adapted from a recent post on Blogcritics.org. Click here to read the full Blogcritics post.
    Wednesday, December 10, 2003
    Online Sales To Set Record, Profits Stay Thin
    Web shoppers are expected to spend more money than ever before during the annual holiday shopping season, but online retailers could face a tough time making much profit. Reuters reports that Forrester Research predicts that while online holiday sales will rise 42% to $12.2 billion this year profitability will be up only slightly from breakeven last year.

    Many Internet retailers are offering steep discounts and free shipping as they compete with traditional stores. In addition, they are increasing product offerings. Top online retailer Amazon.com Inc. has extend its deadline for free shipping on orders of $25 or more to be delivered in time for Christmas to December 15.

    When it comes to selling toys the competition has become brutal as cutthroat pricing pits websites against retail outlets. Even different divisions of the same company are locked in combat. Wal-Mart, the top U.S. toy seller, is charging a shipping fee of only 97 cents for selected toy products bought online and discounting prices below those found in its stores.

    Benefitting small business is the fact that eBay has now become the top place to buy and sell new toys online since buyers can often find new or barely used toys below retail price.

    Read the full story of online holiday sales at Reuters.
    End of Steel Tariffs Hailed by Small Business Leader
    U.S. Congressman Don Manzullo (R-IL) has hailed President Bush's decision to rescind the U.S. tariffs on foreign steel, as a move that benefits small business in America. Representative Manzullo is the Chairman of the U.S. House of Representatives' Small Business Committee.

    His statement, released last week, reads in full:
      "The President's decision to rescind the steel tariffs will bolster the U.S. manufacturing economy and put many Americans back to work. Employees in the U.S. steel-consuming industries -- who outnumber steel-producing workers 59 to 1 -- will no longer have to pay more than their foreign competitors for steel. They will no longer have to worry about steel shortages preventing them from meeting their customers' deadlines. And they will no longer have to worry about the quality of steel they receive compared to the supplies of their foreign competitors.

      "I congratulate President Bush for acknowledging the unintended consequences of the steel tariffs -- which I documented in a series of Small Business Committee hearings last year -- and taking action to correct the damage to the U.S. manufacturing economy. Steel producers are recovering. It's now time to extend that recovery to the rest of America's manufacturers by lifting the crippling burden these tariffs have placed on steel users. America's workers are the big winners today."

    The steel tariffs were criticized by the World Trade Organization and various governments, and were also controversial within the United States. Trade protectionist measures often hurt small businesses. That's because smaller businesses have less cushion for higher prices of materials, and are more sensitive to the backlash/unintended consequences resulting from disruptions in the interrelated, global economic ecosystem.

    Yet, calls for trade protectionist measures had become louder in recent months. Could President Bush's move last week signal a stronger U.S. government stance against trade protectionism?

    Tuesday, December 09, 2003
    Hot Jobs for 2004
    With 2003 almost at an end, executive search firm Christian & Timbers has identified the hot and not-so-hot jobs and industries for the upcoming year. The industries likely to offer positive employment opportunities include healthcare, food service, security, services to the aging, and real estate. Hot specialties include data mining or data management, wireless, bioinformatics and radio frequency identification implementation. Industries likely to find their place in the loser's bracket include mutual funds, tobacco, manufacturing, telemarketing, and email marketing.

    So, what are some of the hottest jobs for 2004?
      Independent board member for public companies
      Human resources executive for healthcare companies
      Executive vice president of sales
      Management of all kinds in medical devices companies
      Chief nursing officer
      Executive vice president for commercial real estate
    It's a good idea for any employer to keep abreast of hot and not-so-hot jobs. If you know how the job market is trending, it is easier to plan for new hires. Check out the complete list of the hottest jobs and conversely the not-so-hot jobs for 2004.
    Monday, December 08, 2003
    Track Trends with the Buzz-o-Meter
    Waypath, a unit of Think Tank 23, has developed an interesting tool that you can use to track how much "buzz" certain subjects are generating in weblogs. It can be a useful tool to track trends and gauge their rising or falling popularity.

    The tool is called the Buzz-o-meter. I used it to generate the following chart tracking four hot trends in the small business world today. Check it out and see what you think. If you click on the chart image or legend, it will take you to search results for each search term.

    Pretty neat, huh? To create a Buzz-o-Meter graph for up to five search terms of your choice, go to the Waypath Buzz Maker at: BuzzMaker.
    Sunday, December 07, 2003
    If All Entrepreneurs Were Laid End to End...
    Across the planet, there are at least 286 million individuals engaged in start-ups. That's a lot of entrepreneurs!

    According to the Global Entrepreneurship Monitor, 2002 Report, entrepreneurs constitute about 12% of the working-age population in the 37 countries covered by the study. Other results:
      The countries with the highest numbers of entrepreneurs are the developing Asian countries (Thailand, India, China and Korea). Next are Latin American countries (Argentina, Chile, Brazil, Mexico).

      In the middle came the former British Empire countries (Australia, Canada, New Zealand, South Africa, U.S.). Europe followed next, then Central Europe.

      The lowest level of entrepreneurial activity was reported in developed Asian nations (Japan, Taiwan, Hong Kong, Singapore).

      Two thirds of entrepreneurs chose start-ups because they perceived an opportunity worth pursuing. The other one third started businesses out of necessity, because they lacked job options.

      Most new firms receive initial support from informal investments from family, friends, business associates, and other personal contacts. An extremely small proportion... 1 in 10,000, receive support from venture capital firms.
    The Global Entrepreneurship Monitor (GEM) research program is an annual assessment of the national level of entrepreneurial activity. It is sponsored by London Business School, Babson College and the Ewing Marion Kauffman Foundation.

    Acknowledgement goes to Torsten over at TJ's Technology, Venture Capital and Entrepreneurship weblog, for alerting me to this comprehensive study.
    Women-Owned Family Businesses on the Rise
    Results of the American Family Business Survey published this year contained some telling data on women-owned family businesses.

    First of all, they're on the rise. There are 37% more of them than five years earlier. No surprise there. As a society we are becoming more gender balanced in the economic and business arenas. Whether a jump of 37% could have been anticipated may be open to debate, but that debate would center on the size, not the direction of change.

    The survey also discovered that women-owned family businesses do more with less. Women-owned businesses had lower revenues on average ($25.4 million) than those owned by men ($30.4 million). However, they generated those revenues far more efficiently. The median number of employees for male-owned family businesses was 50 while that for female-owned businesses was 26. Calculating from those numbers women-owned family businesses turn out to be 1.7 times more productive than those owned by men.

    Women-owned businesses also seem to get more out of their boards. Sixty-six percent rated their board's contribution as good or outstanding while male-owned family businesses gave those ratings to only 57%.

    If the CEO's retirement is anticipated, woman-owned businesses are also more likely to have chosen a successor (49%) than businesses owned by men (40%).

    Women as both owners and CEOs of family businesses is trending higher, and the results they are getting are impressive. Read more on Women in Family-Owned Businesses. Check out the full American Family Business Survey.
    Saturday, December 06, 2003
    Lawyers Using More PDF Files
    Lawyers are increasingly using PDF files. Lawyers are finding PDFs useful when negotiating and finalizng contracts, because the documents are less susceptible to tampering than other file formats. Courts are also jumping on the trend, with some now requiring lawyers to file pleadings in PDF format.

    The blogging-famous Ernie the Attorney has even started www.PDFforLawyers.com and a newsletter to document this trend. And provide useful PDF tips to attorneys and judges in the process.

    Of course, you don't have to be in the legal business to find many of Ernie the Attorney's PDF tips helpful. Even fascinating. Did you know that when you make changes in a Word document, all of your changes show up in the metadata for those-in-the-know to discover? But if you convert the document to a PDF file, the reader can't track the changes you made. This is great to know for the paranoid among us.

    The growth of PDF usage by lawyers is part of a larger trend in the growth in popularity of PDF files. According to Adobe System's CEO, Bruce Chizen, about 12 million people use Adobe to create PDFs today.

    The majority of lawyers and law firms are quintessential examples of small businesses, along with doctors, accountants, dentists and similar professionals.
    Friday, December 05, 2003
    U.S. Economy Becoming More Entrepreneurial
    OK. Now there's proof. The U.S. economy is becoming more entrepreneurial. And start-up companies are helping drive the U.S. economic recovery.

    This HUGE trend was reported in the Wall Street Journal on December 1, 2003 by Jon Hilsenrath.

    He points to a U.S. Commerce Department report showing proprietor's income is up 8.6% over last year, as compared to just a 2.3% increase for corporate employees. He goes on to quote investment strategist Kenneth Safian:

      ...the upshot of the latest trend is that more workers are striking out on their own and earning money doing it. The economy, he says, "is becoming more entrepreneurial."
    And we are not talking small dollars here. The article goes on to point out the magnitude of entrepreneurs on the American economy:
      Today, proprietor's income is taking on a rising share of total national income. At $822 billion, at an annual rate, it now accounts for more national income than the entire manufacturing sector's wages and salaries.
    For more, read: The Self-Employed Boost U.S. Economic Recovery (Wall Street Journal subscription required).

    Thursday, December 04, 2003
    Perquest Payroll -- Perfect for Small Business
    Perquest Inc. recently launched a new payroll processing system designed specifically (yes, really!) for small business.

    Unlike large-company applications that have been repackaged to go downmarket, Perquest was built from the ground up for small businesses with up to 250 employees. And therein lies the beauty of it.

    Perquest is fast. Easy to use. Cost effective. In many ways, goofproof. Exactly the kind of solution that small businesses need and want.

    For small business owners, payroll can wind up being a headache. Many small businesses choose to run their own payroll in-house. But that can lead to costly errors. According to the IRS, 4 out of 10 small businesses are fined for violations of payroll rules. Some small business owners choose to outsource to one of the large traditional payroll companies, bringing headaches of a different kind. Going with a large payroll processor can mean being forced to fit into complex, rigid procedures designed for larger businesses. Not to mention being expensive.

    Perquest has managed to design a service that captures the elements that matter most to small businesses (other vendors trying to tap the small business market, take note):

    1. Fast and simple. Perquest is a Web-based, hosted (ASP) solution. That means there is no software to install, and no costly and lengthy integration projects in order to get started. The business owner doesn't need to worry about servers to run the software and associated databases, systems maintenance, or updating tax rates -- all that is taken care of. The screens use ordinary business terminology, not geek-speak, and the majority are highly intuitive. With Perquest you can get started in under an hour, which is excellent for a critical business process like payroll. Running each payroll can take as little as 5 minutes. To judge for yourself, take the full-functionality online demo.

    2. Full-featured. Perquest offers full payroll processing end-to-end. Perquest handles salaried, hourly and commissioned payments, as well as one-time payments like bonuses. It handles cafeteria plans, 401(k) and other benefit deductions.

    3. A solution that is fully self-serve, 24/7. With Perquest small businesses can do everything online -- every time and anytime. For instance, there is no need to telephone the payroll service during regular business hours or fax any documents. And, as long as they have an Internet connection, small business owners and managers can run payroll any time of the day, from wherever they happen to be...in the office, at home, or on the road.

    4. Price points that small business can afford. Most small businesses do not recognize that there is a price to handling payroll in-house. Just because they aren't writing a check to a payroll service doesn't mean it is no cost. They underestimate how long it takes to process payroll manually. Worse, they don't realize how frequently mistakes can be made, leading to costly tax penalties and unproductive correction time. These kinds of costs are hard to quantify, but no less real. When you capture all costs of doing payroll in-house, Perquest compares very favorably...and may even be less expensive. According to Perquest CEO David Kahn, "Perquest costs less than $900 a year for a five-person business." See Perquest pricing online.

    5. Accurate and Secure. A payroll service must be accurate all the time. Perquest offers a guarantee on its website akin to the guarantees given by tax preparers: Perquest guarantees to file tax forms and payments accurately and on time, or pay the resulting payroll tax penalties. Also, Perquest deploys significant system security measures. For example, it uses Secure Sockets Layer (evidenced by the little yellow lock symbol in the lower right corner of the browser) at very high 128-bit encryption.

    6. Data transfer with other software applications. The most popular bookkeeping software among small businesses, by far, is Intuit's QuickBooks. Any payroll system has to be able to pass data to QuickBooks if it is going to truly serve small businesses and make them more efficient. Perquest exports general ledger data to QuickBooks, eliminating the need to manually key in data.

    7. No IT technical staff is required. Perquest is among the new breed of software companies that make it easy for small businesses to use their service without any particular IT expertise. This is critical for small businesses. It is also something that most vendors trying to reach the small business market just don't get. Small businesses frequently have no dedicated IT staff, or if they do, "staff" might consist of one person wearing 3 or 4 hats. A solution that requires IT intervention is simply not practical for small businesses. If you evaluate some of the leading online services used by small businesses today (e.g., eBay, PayPal), you find an important element in common. They make their technology so simple to use, that it's as if the technology itself is transparent. Perquest has managed to do the same. They've made the technology as simple to use as, well, PayPal, or eBay.

    Perquest is currently available in the U.S. state of California, and will be rolled out to Florida, Michigan, Massachusetts, Texas, New York, Oregon, Washington, and Nevada in January 2004. The rest of the United States will follow within the next year.

    For more:

    Visit the Perquest website at www.perquest.com
    Perquest Makes Payroll a Pleasure in SmallBusinessComputing.com
    Internet Powers Payroll Processing at Silicon Valley Biz Ink

    Wednesday, December 03, 2003
    Top 100 Small Business Resources
    BizBest has released the 2004 edition of its paperback The 100 Best Resources for Small Business.

    The 100 Best Resources for Small Business covers subjects such as day-to-day operations, women- and minority-business ownership, the Internet, SBA loans, legal services and startup, plus:

    -- Top solutions for marketing, sales, customer service, finance and small business technology.

    -- Best places for online tax filing, trade show information, manufacturing help, shipping, insurance and import/export solutions.

    BizBest is independent and accepts no advertising or sponsorships. For more information go to www. bizbest100.com.
    Tuesday, December 02, 2003
    Small Business Holiday Gift Statistics
    With the holiday season officially kicked off in the United States, small businesses are planning slightly higher gift-giving budgets in 2003. However, the overall percentage of small businesses planning to give gifts remained constant compared to last year.

    According to a survey performed by International Communications Research on behalf of American Express's OPEN Small Business Network, U.S. small businesses planned the following gifts for clients and customers:
      - Small businesses' holiday budgets for client and customer gifts this season now average in total $966 (USD), up from last year by about 2%.
      - The number of businesses that plan to give gifts to clients and customers held steady in 2003 at 41%.
      - Sending cards or calendars to clients remained the most popular holiday gesture (18%) followed by a food or fruit basket (8%).
      - The number planning to give retail or restaurant gift certificates to key clients or customers doubled from 4% in 2002 to 8% in 2003.
    The survey also covered small businesses' holiday plans for their employees:
      - Year-end bonuses and parties topped the list, with 43% of businesses planning to give bonuses and the same percentage planning to hold holiday parties.
      - Also, 33% are planning to give employees gifts and 18% intend to give raises.
      - And, when you look at businesses with over $200,000 (USD) in annual revenues, the numbers are significantly increased over smaller counterparts when it comes to bonuses (60% vs. 26%), holiday parties (54% vs. 31%), holiday gifts (40% vs. 28%) and pay raises (27% vs. 10%). Not much of a surprise there, of course -- at under $200,000 in revenues, there just isn't as much to spread around.
    The survey is based on a representative sample of 787 small business owners/managers of companies with fewer than 100 employees across the United States.

    For free and useful information about holiday planning for small businesses, including tools and tips, visit the OPEN Network's Small Business Holiday Center.

    Monday, December 01, 2003
    South Korean Small Business Lukewarm Over 5-Day Workweek
    In Western countries, such as the United States, the 5-day workweek has been the standard for a long time. For so long, that we sometimes forget that other parts of the world work a longer week.

    South Korea is one such part of the world. A recent article in the English-language version of the Digital Chosun reports the following in response to South Korea's plan to adopt a 5-day workweek as the standard:

      Unlike the nation's financial sector and major conglomerates that are jumping on the bandwagon to join the five-day workweek system, recent data show only 2 in every 10 small and medium manufacturers are considering the early adoption of the shortened work hour program.

      According to data released by the Small and Medium Business Administration on Saturday that surveyed 1,132 SMEs during the month of October only 2.4 percent or 27 companies were found to take every Saturday off.

      The study showed about 35 percent of the surveyed manufacturers operated during morning hours on Saturdays, 31 percent worked every other Saturday while 28 percent worked full-time. ***

      As for the reasons for these companies' lukewarm support to the adoption of the shortened work hours, companies expressed concerns over expected hike in labor costs and a setback in production. ***
    Of course, even in the United States, competitive pressures routinely require small businesses to work longer workweeks. For example: if the industry requires it (retail), or if the business status requires it (startups and entrepreneurial ventures), or for various other reasons.

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

    Home | Privacy | Terms | SmallBizTrends
    (c) Copyright 2003 - 2005, Small Business Trends LLC. All rights reserved.