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Monday, May 30, 2005
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Internet is Transforming Rural Businesses
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The Internet is transforming rural businesses and extending their reach. Some small rural businesses are now able to operate globally, due to being online.
The University of Minnesota in the Midwest United States conducted a series of case studies profiling how rural Minnesota businesses are using the Internet. Although these case studies profile U.S. companies, many of the same principles would apply to rural businesses in other countries.
Among the ways the Internet has transformed these small businesses:
- A Czechoslovakian pastry baker, Anrej's European Pastry (case study), is able to do business using the Internet, without even taking credit cards online. It sells its pastries by getting orders via the Internet and then putting the invoice in the box when the pastry is shipped to the customer.
- The owners of an organic fabric business, Wild Rose Farm (case study), are able to have the lifestyle they want, living on a farm, yet reach out beyond their local area. "[The Internet] gives us access to the world and gives the world access to us. But also we work hard at what we do, and because of how we live and where we live we were able to stay in business. We maintain a fairly low overhead by working here on the farm."
- A recycling container manufacturer, Pro-Tainer (case study), was able to pick up the federal government as a customer because of the Internet: "Without the Internet and without our web page, I don't think we could have done business with the United States government. That's probably what got us in the door. We were one of the frontrunners in getting involved with them (in the products that we supply). Not having that, I don't think we'd be in there today. It really is that important to them. They do everything that way."
It's case studies like these that cause me to be puzzled when I read that only half of small businesses have a website. Most of the websites of the businesses profiled are simple and straight forward. That's all that's necessary to conduct business.
There are 15 case studies -- read them all.
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By Anita Campbell | Permalink |
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Sunday, May 29, 2005
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Upcoming PowerBlog Reviews
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One of the trends we noticed in early 2004 was that of small businesses taking to blogs to gain Web visibility, serve customers and grow their businesses.
To understand that trend, we started a weekly feature back in February of 2004 called PowerBlog Reviews.
Each week we review notable examples of blogs that are being used for some sort of business purpose, with a concentration on "small business." We pick out a few key points about each blog that we think are powerful and serve as a "lesson" to other bloggers.
We've completed 67 PowerBlog Reviews to date, covering sites from seven countries. The businesses involved have included a 100-year-old jewelry retailer, a restaurant, a winery, a lessor of Federal campgrounds, a worker's compensation service firm, business school professors, a publishing company, three different law firms, a former homeless person turned entrepreneur, a metal job shop, two Microsoft MVP consultants, realtors, marketing professionals, business school students, several types of technology companies, authors -- well, the list goes on.
Here is the schedule of blogs we will be reviewing in upcoming weeks: 5 June 2005 - Blogging About Incredible Blogs 12 June 2005 - AllBusiness Blog Center 19 June 2005 - Small Biz Sense 26 June 2005 - New Millenium Minds 3 July 2005 - Innovation.net 10 July 2005 - Joseph's Marketing Blog 17 July 2005 - Kiger's Notebook 24 July 2005 - Landfair Furniture 31 July 2005 - AutoMuse If you would like your business site reviewed, please email me.
Finally, I want to acknowledge and thank Lynne Meyer, who has been writing the PowerBlog Reviews recently and doing a great job at it.
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By Anita Campbell | Permalink |
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PowerBlog Review: Notes from the World of Anger Management
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Editor's note: We're back once again with the sixty-seventh 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
Today we review Notes from the World of Anger Management.
Bet you're asking yourself "What in the world does anger management have to do with small business?"
Plenty, according to anger management expert George Anderson, who's president of global anger management training company Anderson & Anderson and a Diplomate of the American Association of Anger Management Providers (AAAMP). In addition to his impressive professional credentials, George also recently had a gig in popular culture. He was the technical consultant on the Sony Pictures movie "Anger Management," starring Jack Nicholson.
The contents and links George uses with his blog demonstrate many value-added techniques bloggers can incorporate in their own blogs.
He explains that his blog is designed "to promote professional anger management research, intervention, news and anger management provider information." George links his blog to both his own business's web site and that of the AAAMP.
In addition, the blog highlights and includes links to news articles on anger and anger management. The links are provided to educate readers about how anger is a significant problem in the workplace, schools, the criminal justice system, sports leadership and even politics.
Here's something that readers of this blog will find interesting and that can work for any field. In the March 23 post, he describes "A Typical Day in An Anger Management Practice." This is an excellent technique to illustrate what a particular field like anger management is all about, and it also personalizes the blog a bit giving us real life examples.
The postings also demonstrate how a blog can be used to take a stand on important policy issues and shape public debate on a subject. An example of this is the April 29 posting, "An Open Letter to Mental Health Clinicians." George points out that anger management is a legitimate discipline that should play an important role in society and needs to be included on multiple fronts, including the military, with soldiers returning from Iraq, and school yard bullies. This aspect of his blog nicely complements the work of AAAMP in this area.
Additional techniques George employs are reporting on trends and giving real-world examples. In his May 4 posting titled "Trends in Anger Management," he notes that there's a growing trend of more small businesses requesting anger management training for their staff:"Some of our recent small business cases include a pediatric medical practice that referred an office manager. An animal clinic sent a technician, and we received a request for executive coaching for an important Neurologist whose bedside manner was problematic." While the field of anger management may not be mainstream yet -- and is even somewhat misunderstood -- with the blog George is tackling the challenge of educating people and elevating awareness that this field exists, that it has applications in many settings and that it is has an important place in our world. Notes from the World of Anger Management is truly a purpose-driven blog.
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By Anita Campbell | Permalink |
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Thursday, May 26, 2005
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Small Business Factoring
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Small Business Trends is now providing content services to other websites. One of the sites at which we contribute is a small business finance blog over at Facteon.
Facteon is a factoring service for small businesses. What that means is that if a small business is owed a decent-sized invoice (typically US$25,000 and up), but needs money for, say, payroll and can't afford to wait 60 days until the invoice is paid (because we all know employees won't wait that long for their checks), the owner can "sell" or factor the invoice to a company like Facteon. Facteon will advance the invoice amount, less its fee of course.
My role in the site is to help de-mystify the factoring process and provide sources of reliable information about factoring.
I write under my byline to add to the posts of the CEO of Facteon, who also will be blogging.
Some of you know that I was a banker... back in the day. So I feel comfortable writing about financial matters for small business.
You'll find a truly-astonishing number of spam sites about factoring out on the Web. The Facteon blog is not like that. Rather, it offers on-point information from only the most credible sources. Kudos to Facteon's management for not taking the spam way out, but instead charting a highly-credible approach.
(My acknowledgement goes to Paul Chaney at Radiant Marketing Group who enlisted our services on this project.)
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By Anita Campbell | Permalink |
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Tuesday, May 24, 2005
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Example of Niche Marketing
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Here is an example of niche marketing: a brand new print magazine, called Magazine Soho. The publication targets not small business -- a broad category to be sure. No, it targets a segment of small business: Soho's -- small office, home office workers. And with a particular geographic emphasis on southeastern Wisconsin, USA.
Magazine Soho is published by Cd Vann. I "met" Cd through online networking. Over the weeks, in between all the hard work of getting the magazine off the ground and the first edition in print, she and I managed to email one another and talk by phone.
Cd had this to say in her inaugural edition:Call me a "serial entrepreneur." Call me a free agent, micro business, or better yet, call me a Soho. But please, do not call me a "small business." I think BIG! I am a property owner, a graphic designer, a web mistress and now, a publisher. I am poised for growth. I am constantly looking for ways to offer excellent customer service. I "work my net" while paying it forward.
But to say that I am small is to imply that I do not have purchasing power. Don't let the budget decisions of a few define us all. I have spent thousands of dollars on marketing, advertising and building my business -- especially in office supply stores; they love me! I am a growing business. I am a Soho.
I know of other Soho's across the United States; better yet, right here in the state of Wisconsin. These are the businesses that will never make the "million dollar income stream," yet vigorously provide services for large companies through private, local and government contracts. Most importantly, Soho's contribute to our economy via jobs, services, products and inventions.
It is because of these vast contributions that I am launching this magazine.
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By Anita Campbell | Permalink |
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Monday, May 23, 2005
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Trending Toward Micro-Markets
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Markets are fragmenting into micro-markets. Instead of going after broad markets -- say, women aged 18 to 49 -- companies are segmenting their customers into narrower profiles based on lifestyle.
Today it's not just about understanding the demographics of your target market. Instead, sellers have to understand attitudes and lifestyles. Intuition is as important as or more so than demographic data.
And those attitudes and lifestyles mean smaller and smaller niches.
However, as this quote from a recent Entrepreneur article notes, small businesses have a ways to go before they become proficient at segmenting customers:
Instead of boxing their customers into one profile, large companies are segmenting customers into ever-narrower lifestyle profiles and categories to understand their core values. They're targeting the 20 percent of customers who generate 80 percent of their business, says James Chung, founder of Reach Advisors, a Belmont, Massachusetts, strategy and research firm. Electronics retailer Best Buy, for example, now focuses its business on five customer profiles instead of trying to broadly tailor its marketing to fit every customer profile.
Most entrepreneurs, however, still try to be everything to everyone by targeting a wide demographic. "Most small businesses are afraid of planting a flag and saying that their business focuses on a specific, high-value target audience," Chung says. "[But] it's a lot easier to focus on a profitable target, then do everything you can to engage them." I actually believe the landscape for entrepreneurs is more complex than the above quote suggests.
On the one hand, some small firms can't find enough customers in their local areas for the niches they would like to specialize in. So, out of necessity they feel forced into generic offerings that cut broad swaths. Given an abundant supply of potential customers, I think most would gladly specialize in niche products or services.
On the other hand, as Professor Cornwall notes, entrepreneurs are well-suited for niche marketing. "...[M]icro marketing is what we do best. We love finding niches and giving them what they need."
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By Anita Campbell | Permalink |
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Sunday, May 22, 2005
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PowerBlog Review: AMCP Computer Privacy
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Editor's note: We're pleased to present the sixty-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.
A Black Belt in Blogging By Lynne Meyer
If there were such a thing as a third-degree black belt for blogging, Alex Morganis would certainly be entitled to wear one.
He's webmaster of four technology and computer news blogs and was recently nominated for Microsoft's "Team 99" to test and blog about Longhorn, their the next-generation operating system. He also writes blogs for Tech News Online and Spyware Informer. In his spare time, Alex beta tests for AOL, Google, Yahoo, Microsoft, and the Mozilla Foundation. He's at AMCP Computer Privacy TECH BLOG. AMCP stands for Alex Morganis, computer programmer.
Alex says he's "part of a talented group of computer nerds," and the main goal of their blog is "to inform readers about the ever-changing tech world by providing news about the latest technology developments, spyware, viruses and more. We also try to help out our readers when they e-mail us." I don't know when Alex sleeps, but when it comes to technology, he knows his stuff. There's abundant news about cutting-edge technology in all of his postings.
Case in point. On May 11, he tells us about test driving AOL's new AIM (AOL Instant Messages), a beta version of their new program, code-named Triton:"Triton has a whole new and improved interface, as well as taking into account that instant messaging now goes beyond simple PC-to-PC text exchanges and also includes video and audio communication, as well as connections with wireless devices," he explains. "Some of Triton's features includes multiparty voice chat and an IM catcher feature that intercepts messages from senders not on the user's contact list, allowing the user to preview the message and decide whether to accept it, ignore it, or report it to AOL as an unsolicited commercial instant message." Alex also updates readers on computer viruses. "We recently blogged that Sober.N is being detected again and continues to perpetuate. According to U.K. Anti-virus company Sophos, this worm accounted for 77% of all virus activity, and the virus writers used spam technology to send it out." Alex explains that, according to Sophos, the virus writers use German language messages for German Windows users, telling them they've won tickets to the World Cup. Unfortunately, this has been an effective ploy in that region. "Although different anti-virus companies call it different things," Alex warns, "Sober.N and Sober.P are the same virus." Fortunately, Alex isn't all work and no play. He also makes time to review some of the fun stuff. Here's what he recently had to say about Sony's newest PSP gaming system. "Man, this just keeps getting better! As soon as we turned it on, we were amazed at how good the graphics for the games were. The screen was great, with no pixel problems. And the sound . . . wow!" (Hmmm . . . sounds a little like a kid having fun with a new toy, doesn't it?)
Check out Alex's take on new technology developments (as well as his reactions to some fun stuff) at the AMCP Computer Privacy TECH BLOG .
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By Anita Campbell | Permalink |
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Saturday, May 21, 2005
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Three Examples of On-Again, Off-Again Entrepreneurs
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Back in April I wrote about a trend I see increasingly, called the "on-again off-again entrepreneur."
I promised I would write more about that trend, so here goes.
The on-again off-again entrepreneur is someone who moves back and forth between being employed and owning his or her own business -- multiple times.
In today's world we are almost assured of having more than one career in a lifetime, not just a single career.
Luckily we don't have to choose between either being an entrepreneur or being employed by another company. Today more and more people will find themselves at various times as entrepreneurs and being employed, depending on the circumstances in their lives.
An on-again, off-again entrepreneur can be anyone, of any educational background, any age, any gender, just about any line of work.
However, I have observed that the on-again off-again entrepreneur tends to fall into one of three profiles:
- 20-something or 30-something entrepreneur - This person has a strong desire to be a business owner, but faces financial commitments -- because of a young family perhaps -- that require taking a job. Our thirties tend to be some of the heaviest spending years, because of buying homes and raising children. So it is no surprise a person may feel financially-pressed, and feel he or she has to take a job out of necessity.
This person may have started a business previously, and found it did not grow fast enough to provide a reliable income, or wasn't successful for whatever reason. The lessons this person learns during an initial foray into entrepreneurship can be put to use the next time around the startup cycle. Often the aspiring entrepreneur in this situation will be putting aside money while employed, so as to have a stake for starting the next business.
See my example of this type of on-again off-again entrepreneur.
- Lifestyle-necessitated entrepreneur - This person is someone who was employed, but due to life commitments needs a more flexible work schedule for a period of time. Typically this might be a stay-at-home-Mom who has babies or young children. (And let's not forget the stay-at-home Dads.) Or it could be a person caring for an elderly parent, or having health problems that make long commutes unfeasible. A full-time, high-pressure job is not compatible with their life responsibilities.
In the past this person might have gone to a part-time job or become a full-time "housewife" for a period of time. Some still do.
But today, attitudes toward entrepreneurship are changing. The maturation of the Internet, the availability of mobile telephones and inexpensive long distance rates, and the ready access to so many resources for entrepreneurs, makes running a business at home an ever more viable and attractive proposition.
Just search in Google for the acronym "WAHM" which stands for "work at home mom" to get a glimpse into this world. Visit some of the sites. One site will lead to another and then to another.... You will discover an entire subculture of lifestyle-necessitated entrepreneurs.
- Older entrepreneur - This entrepreneur may be someone who was employed for most of his or her career. Then he or she leaves employment and becomes self-employed. Often the kind of business this person runs is consulting, writing, speaking, and other skills that leverage knowledge accumulated over the years.
More people over 50 are becoming entrepreneurs these days -- see this USA Today article profiling this phenomenon.
But retirement planning goals, need for health insurance, or an especially attractive job opportunity may entice this person back to the ranks of the employed for periods of time. In fact, the website Not Yet Retired outlines "working retirement" strategies that may involve entrepreneurship or getting a job.
At this stage of his or her life, the entrepreneur doesn't have expectations of being employed for a long time. A year, perhaps 2 or 3 years, may be all this person expects, fitting in nicely with certain employers' needs. Often this person will attempt to keep the business going part-time while being employed. I'd like to hear from others about their experiences moving in and out of being employed and being a business owner. Please leave a comment below sharing your circumstances.
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By Anita Campbell | Permalink |
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Wednesday, May 18, 2005
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Owner's Series Books for Business Growth
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"Your time is precious. So why spend it reading this book?"
These are the opening lines in all three of Andy Birol's new books on business growth. The books are part of the Owner's Series and designed for small business owners.
Andy Birol is a small business authority -- a consultant, speaker, author.
Andy is a colorful guy who works large. Where most other authors write one book, Andy publishes not one, not two, but three books at once. I highly recommend you read them all.
Each book in the series stands alone, although they also complement each other as a set.
Each book targets businesses facing different circumstances: - "Accelerating Your Growth" is all about growing a business during the good times, by capitalizing on your firm's opportunities.
- "Returning Your Business to Growth" is about growing in turnaround situations or during times of problems.
- "Growing Your Business During Succession or Transition" is about growth during periods of change.
The books are based on articles that Andy has written and case studies. They are extremely timely and up to date. Each chapter is written in a crisp distinctive voice that makes it interesting to read.
These books are part of that new breed of books best described as street smart. The author has a knack for cutting to the heart of matters for small businesses. Consider some of his advice:
CRM software - few small businesses "have the resources or the needs to use the features of some of today's hottest products."
Strategic plans - "analyzing market share is a waste of time for smaller businesses" that could be better spent analyzing what share of your customers' needs you could be meeting.
Pricing - "never base prices on costs."
The unmistakable focus in each of the books is on how to make money and avoid going down paths that waste time with little or no return. The author says that sales and marketing goals should come down to three things: finding customers, keeping customers, and growing customers.
If you are focused on making money for yourself and your company, this set of books is a must-read. And if you aren't focused on making money you might want to ask yourself what you are doing in business.
Finally, to answer Andy's question at the beginning of the books, yes, your time is precious. That's exactly why you should read these books, because you want results fast.
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By Anita Campbell | Permalink |
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Tuesday, May 17, 2005
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New Business Model Evolves for Music Artists
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Editor's note: we've been following the dramatic changes in certain industries and what they mean for entrepreneurs, including music-entrepreneurs. An increasing trend is for music artists to choose to stay independent and market their own works, instead of signing with major record companies. So it is with great interest that we present this guest column by Jason Feinberg on the new business model for music artists.
By Jason Feinberg
A trend is often most fascinating when it is counterintuitive to an industry's traditional ways of thinking.
In the music industry, up and coming artists are finding great success by doing the exact opposite of traditional practices. Instead of selling their music, they are giving it away -- completely free -- on the Internet.
The music industry has been looking for ways to deal with music being distributed via the Internet for almost a decade. During the majority of this time, most of the bigger record labels held a strong stance against placing music on the Internet for any purpose -- be it sales, marketing, or promotions.
All efforts put forth by these companies were focused on shutting down websites and software companies that were making music available. Most of their efforts ultimately proved to be in vain, as they could simply not keep up with the rapid pace of Internet growth and expansion.
Smaller record labels had varied strategies in managing their music online. Some attempted to embrace emerging Internet technology by making their music available, while others shied away from using the Internet for anything more than simple web pages.
As more and more companies began assessing the opportunities the Internet provided, many players in the industry began to realize that combating the issue of music being distributed online was a futile fight. Music fans were storing, sharing, and buying music online at an exponentially growing rate. There was no way to avoid it -- the industry simply had to devise a way to control it.
At this point, it was quite clear that consumers wanted their music on their computer and portable devices; it was also becoming evident they were quickly adopting new technology and distribution methods. From this arose a tremendous opportunity for musicians that were not yet under contract with any of these record companies.
Instead of forcing consumers to pay for the rights to own and listen to an artist's music (the traditional practice), independent musicians began giving their music away for free with the hopes of creating awareness of their art and increasing exposure for themselves.
Websites such as MySpace and MP3.com began offering a centralized location for artists to distribute their music for free. These sites have proven wildly successful. MySpace has over 12 million users and is growing rapidly. Sites such as these have provided independent artists an avenue to reach potential fans that was previously only available to those signed to a record company that had a marketing and promotions budget.
The ultimate benefit to these self-financed artists is that CD sales created by this business practice have a significantly higher profit margin than a structured record label would make. Labels spend tremendous amounts of money marketing, promoting, and distributing their product, all of which eats away at their profits.
Typically an artist signed to a record label might net one dollar (US) per CD sold -- and that is only after the label has recouped its expenses. An independent artist using free promotion techniques can see as much as twelve dollars (US) profit per CD.
It is this simple math that has inspired many musicians to completely ignore the traditional route of signing with a record company in favor of doing everything on their own.
As record labels rush to develop new ways to both fight and embrace the Internet as a music distribution tool, independent artists continue to capitalize on the new trend of free self-promotion. As more and more Internet sites devote themselves to creating exposure for these artists, an entirely new business model for the entire industry is being developed.
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Jason Feinberg is President and CEO of On Target Media Group, a music industry marketing firm specializing in Internet and New Media promotion. He is also the author of the Music Business Blog, an online journal focusing on current trends and topics in the music industry.
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By Anita Campbell | Permalink |
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Tech Lingo Baffles Small Firms
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Telecommunications firms would like to sell more products to small businesses but have a hard time communicating with them. That's according to a recent survey in the U.K. conducted by the Ofcom Consumer Panel (full PDF report here):"The Panel interviewed owners and managers from 300 firms, each of between one and 10 employees in size, and found that most were baffled by the latest communications terminology. Just 16 percent were able to accurately say that 3G was a high-speed mobile technology, while 17 percent gave a wrong answer and 67 percent said they hadn't heard the term.
Wi-Fi fared even worse: just 8 percent understood that Wi-Fi was a wireless technology that provided fast Internet access at hot spots, with 7 percent giving an incorrect answer and 85 percent not able to give an answer. And awareness of voice-over-IP services was lower still, with only 3 percent defining VoIP accurately, another 3 percent giving a wrong answer, and 95 percent admitting total ignorance." While this study applies to the U.K., I think you would find similar results to one degree or another in most parts of the world. Industry-specific lingo is the main culprit.
And it is not just the telecommunications industry. The same goes for many other technology products, and even for many business services.
It is a continual challenge for any vendor trying to reach the small business market. How do you explain complicated technology products in layman's terms to busy small business owners, when you are likely to get just a few minutes or perhaps just seconds of their time?
And the challenge will only grow over time, as technology usage grows and accelerates.
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By Anita Campbell | Permalink |
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Sunday, May 15, 2005
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PowerBlog Review: Presidents Update
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Editor's note: Welcome to the sixty-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.
Valuable Lessons from an MVP By Lynne Meyer
Presidents Update is a blog by Anne Stanton, president of the Norwich Group of Norwich, Vermont, in the northeast USA. The Norwich Group provides onsite technology consulting to technology companies, accounting firms and consultants nationwide.
Anne recently won the Most Valuable Professional Award for Microsoft Customer Relationship Management. The MVP award recognizes outstanding technology experts around the world who provide invaluable online and offline expertise that enriches technical communities featuring Microsoft products.
In other words, Anne really knows what she's talking about when it comes to technology. And -- lucky for us small business owners -- she's willing to share her knowledge with us.
Anne started blogging in mid-2003, and says she posts almost daily. In analyzing the content of her postings, I discovered her blog to be a helpful blend of straightforward "how-to" tips, reviews of important business concepts and information she has learned from others.
One example of her "how-to" tips is her April 15 posting titled "Do you have a plan?" According to Anne, the standard training approach to applications is "install, tackle and master." While this approach is popular because it generally works, she notes, it doesn't work that well in the world of Customer Relationship Management software. "You want to incorporate a CRM solution into the culture of a business, and it ties into business processes much more than most other applications. Additionally," she says, "the ground work and decisions you make in the beginning do and can come back as big headaches later down the line." Anne's recommendations?
1. Have a very detailed plan. 2. Understand how the data going in is going to be information coming out. 3. Be cautious of custom fields that offer too many choices. 4. Include the expected need to change things six months down the line. 5. Definitely be very aware of everyones expectations. As an example of how Anne shares information provided by others -- and as a helpful review of an important business concept -- she passed along key points from a presentation she attended about branding. "According to the speaker," Anne notes, "even if you own a small business, your company brand offers a message to your clients. One goal of a brand, of course, is the right message and a consistent message across everything you do. But even more importantly, this message is a promise from your company to your clients."
Anne says blogging has been a huge business tool for her. "Blogging has opened many doors of opportunity and generated more growth for my business." She shares what she calls a classic blogging story. "Bill Ives (Portals and KM) read my blog and posted a comment. He was writing a book on blogging and was going to visit his daughter attending school in Seattle. I introduced Bill Ives to Robert Scoble, Microsoft's #1 blogger, and Bill interviewed Robert for his book. Bill, in turn, introduced me to his publisher and co-author Amanda. Amanda was a tremendous resource for me when I was seeking information on publishing a book I co-wrote." A terrific example of how blogs can lead to win-win situations.
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By Anita Campbell | Permalink |
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Friday, May 13, 2005
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Economy Slowing But Conditions Positive for U.S. Small Business
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Economic conditions for small business in the U.S. are positive, although they have weakened somewhat since 2004.
Higher energy costs and rising interest rates are slowing the economy.
Employment, a lagging indicator, is actually still rising nicely. However, this is probably due to employers having held off as long as possible to hire, and now being required to hire to meet customer orders.
What's perhaps more telling is what business owners plan to do in the near future.
According to surveys completed over the past five months, the confidence of U.S. small business owners appears to be cooling a bit when it comes to the economy.
Fewer small businesses say they plan to expand and/or hire in the upcoming three months. It looks like American small businesses are putting the brakes on somewhat.
See the chart to the right where I have summarized some of the data from the U.S. Small Business Administration Office of Advocacy's Economic Indicators Report for the first quarter of 2005. The report came out last week. It may help you forecast economic trends and gauge their impact on the small business market this summer and into the fall.
Remember, as always, to put this report in perspective. It doesn't mean the economy in the U.S. is tanking. It simply signals a slowing of the economy after a nice expansion in 2004.
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By Anita Campbell | Permalink |
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Wednesday, May 11, 2005
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Leading Cause of Death of Startups: Real Estate
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Ross Mayfield, CEO of SocialText, and a long-time blogger himself, is finally getting an office.
For two years his company has operated virtually, with employees working from their homes across the United States. He calls it "net-enabled bootstrapping" because the company has used technology tools to operate at a low cost and grow from within.
He says real estate is the leading cause of death of startups, and notes:"I am convinced that being virtual is the best way to start a company. The benefits go beyond cost (although the culture of frugality can go a very long way). In our case, it improves the product. But generally it is more productive. When the bandwidth for collaboration is constrained at times, you gain a certain focus." Be sure to read the entire post, including the comments. He also notes the downsides of virtual businesses.
Two other blogs have picked up on the post and added their own insights -- check them out too: Steve Shu, and WordPress founder Matt Mullenweg who notes that the WordPress team operates virtually, also. (WordPress is a popular Open Source blogging software.)
I find blogs such as Ross's and Steve's and Matt's -- which discuss their own experiences and observations -- to be excellent sources of insight to "see" trends.
In this case, they give a great sense of how technology startups operate today.
Forget three guys in a garage -- that was your father's startup. Today it's 3 people spread out across the country or even across continents, each in their home offices or back porches with laptops, mobile phones, and WiFi.
For more, read my essay "Trend: Small Businesses Go Virtual."
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By Anita Campbell | Permalink |
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Tuesday, May 10, 2005
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BMW's Ad: No Respect
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Editor's note: I am pleased to present another article by expert guest blogger, John Wyckoff. I actually moved his article up by a week on the schedule, because the topic is so timely. He examines a highly controversial new "advertisement movie" by BMW and gives his opinion on what it means for BMW's franchise motorcycle dealers.
By John Wyckoff
SEX SELLS! Can it go too far? I think it just did. Consider BMW's new Internet ad movie.
I've been writing for the powersports trade press for more than 30 years. During that time I've read letters to the editor from readers complaining about the use of scantily clad, well proportioned, young ladies often used to show off everything from motorcycles to boots and batteries. Those ads continue to appear in both the consumer and trade press, albeit in diminished quantity.
While attending trade shows over the years I've witnessed similar displays of obvious sex; some in good taste others not.
Of all the brands available to US buyers one would think the "macho" market bikes would feature more sexy women and "bad boys" -- not the upscale aristocrats of the motorcycle world like BMW.
Let's take a look at reputations. - Kawasaki once produced an ad featuring spiked haired, inappropriately dressed guys with the performance bikes in a setting that could have come from any "war zone" in a big city.
- Yamaha produced a video ad showing a bike accelerating wildly between rows of people then zooming in on chunks of burning rubber left in the bike's wake. Both ads were roundly criticized in the consumer press.
- Harley-Davidson, on the other hand, has carefully avoided that image, while some of the custom bike makers have embraced it.
With the advent of the remote control on TVs and the TiVo, consumers have the option to bypass ads. Now, with the ability to stream video clips on computers and insert them in movie theaters to look like ads for coming flicks advertisers have the ability to entice viewers with edgy, longer than one-minute, ads disguised as trailers.
BMW, the German motorcycle and carmaker, up to now has had the reputation of being circumspect in their advertising. Perhaps that sometimes translated to boring. Their bikes and cars appeal to consumers interested in performance, engineering excellence and quality.
BMW is about to change all that. Some might call it "stretching the envelope." I call it unfortunate. The reputation of motorcyclists has always been complicated. It may be harmed and dealers and manufacturers may feel that harm alike.
BMW, whose sales in the United States have been slipping, is trying a new tactic. They have a six-minute film introducing their new K1200 R bike. To my knowledge the film is unlike anything this previously proper German company has ever produced.
I suspect they felt the impact of consumers hitting the mute button, turning the page in the magazine or otherwise ignoring their ads. That won't be the case with this new, over 6-minute offering. It contains bare breasted, exposed bottomed women. It also contains aggressive, graphic sex. It's dark, brooding and antisocial. That combination alone will assure its success in a world dominated by suicide bombers in Iraq and random killings on our highways.
I hate to go moralistic but I wonder if we've lost our sense of decency. Must we resort to over-the-top graphic ads that should have an "X" rating? More than that, I wonder if the powersports industry is going to accept BMW's point of view that we should become a bunch of sociopaths appealing to other sociopaths.
The AMA (American Motorcyclist Association) and the MIC (Motorcycle Industry Council) along with most of the OEMs have been trying to clean up the industry's reputation for years. They were actually making headway -- until now.
It is my hope that the AMA and the MIC weigh in on this debate.
This new BMW ad will, undoubtedly, attract viewers. Some for the thrill, some just to see how we might be at the doorway to a new base paradigm. Will it affect dealers and manufacturers other than BMW? I believe it will -- and not in a positive way.
The film depicts Muslims in a subliminal but negative way. It portrays low-life people as "cool." Not to mention the way it portrays women. I can imagine some current BMW owners being so offended by this video that they opt to ride a different brand.
I can hear the outrage of venting consumers encouraging, even demanding their dealer do something about it or suffer the consequences of a destroyed reputation. I suspect dealers will be questioned about how they feel about this new direction and what they are going to do about it.
This video is going to get attention. I just hope it doesn't become the new low-bar standard and lead the general public to think that respect (the title of BMW's flick) is one thing the motorcycle industry has lost.
Dealers, you can only hope that the mother of the young, potential bike buyer doesn't see BMW's newest offering.
(Editor's note: BMW's "Respect" video can be used to be found here. As of May 11, 2005 the video ad has now been taken down. The author's sources tell him that the ad will likely be available in Europe but not the U.S.
(UPDATE May 26, 2005: A sharp-eyed reader sent me a link to this website with the BMW "Respect" video, along with several other video clips of the machine. The Respect video is the second link from the top.)
* * * * *
Like this article? Read more by John Wyckoff. Get the full list of articles on our Experts directory.
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By Anita Campbell | Permalink |
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Monday, May 09, 2005
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Number of Microbusinesses Grows
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Microbusinesses are the tiniest of small businesses. And their ranks are growing.
A microbusiness (or microenterprise) is a business employing 5 or fewer individuals, with start-up financing needs of $35,000 or less.
The Association for Enterprise Opportunity recently issued some figures on growth of these small businesses. According to its Microenterprises Employment Statistics Report, the number of microbusinesses in the United States grew by 5.9% between 2000 and 2002. Microbusiness employment now account for over 17% of U.S. employment.
Here is a summary chart extracted from the report:
As you can see, the vast majority of these very small businesses have no employees (i.e., they are self-employed).
The report demonstrates the impact of very small businesses to the economy -- these numbers are not insignificant. At the same time, the report leaves certain obvious questions unanswered, such as:
- How much of the growth of microbusinesses was due to the dot com bust and recession of 2001? Much of the growth was among the self-employed.
- Is this a long-term trend? Will microbusinesses continue to grow in 2003 - 2005 and beyond? Or will some of these mirco-entrepreneurs return to employee status with an improving job market?
- How many of these microbusinesses are part-time, with the owner also holding down a job?
Regardless of these questions, I recommend you read the whole report. It even breaks down the number by individual state.
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By Anita Campbell | Permalink |
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Sunday, May 08, 2005
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PowerBlog Review: The Other Bloke's Blog
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Editor's note: Welcome to the sixty-fourth in our regular weekly series of PowerBlog Reviews of business weblogs. This week's review is being guest-blogged by Lynne Meyer.
Beware Shady SEO Stuff and Cardboard Web Sites By Lynne Meyer
Barry Welford, President, Strategic Marketing Montreal tells me the goal of his blog, The Other Bloke's Blog, is to provide visibility on issues of importance to the business community in Montreal. He also posts information to appeal to a wider business audience beyond Montreal. In addition, he intermingles enough references to upcoming fun activities in Montreal to make me want to log onto Expedia and book a flight there pronto!
There's plenty of good stuff here - from search engine optimization and buzzword marketing to turning prospects into sales.
What I especially like about this blog is that Barry fearlessly gives us "the good, the bad and the ugly." I culled the following two postings as examples of some of the "bad and the ugly" business practices out there. You could call these cautionary tales, as they demonstrate how small business owners pay good money for services they may not be getting.
In "Watch it, your SEO is showing," (April 29, 2005), Barry enlightens us that there's a dark side to search engine optimization. "While most individuals involved in providing SEO use reputable methods, there are some dishonest practices. These shady characters attempt to deliver to search engine web pages that will rank highly, while showing something totally different to people who visit the site." It sometimes takes a bit of digging, he explains, but it's easy to spot their work. "So, if one of your competitors is consistently at the #1 or #2 position for important keywords, it's good to question why." Barry also links an article on the topic titled "Worthless Shady Criminals: Defense of SEO," that provides more information about these unsavory tactics.
Speaking of web sites, in his March 23 posting, Barry poses the question - "Is your web site a cardboard replica"? He relates that he's heard the following comment over and over again from small business owners : "I spent good money to get a website, and I've seen no action as a result. What a waste of money." This may be because you've been sold a cardboard replica of a web site, Barry states. "A cardboard replica is a facade that looks impressive, but there's nothing behind it," he explains. "You can quickly check to see whether your website seems to be a cardboard replica by doing a Google search of your company name. You'll find your web site among the chosen references. "At the end of the short few lines about your web site, there will be a link labeled 'Cached'. This is the version that Google has seen. On that Cached page, there is a line saying 'Click here for the cached test only'. That really is the content that Google is seeing behind the facade," he notes. "You may be shocked to find there's nothing or very little there. No wonder you're not too happy with your web site. It's just a cardboard replica."
Wow! Shady SEO practices and costly web sites that are merely cardboard replicas. Who knew? Well, Barry does. And, fortunately for readers, he's willing to share this and other valuable information.
* * * * * -- Lynne Meyer, APR, is a senior public relations professional with more than 25 years of experience in all aspects of marketing communications. Lynne is president of her own marketing consulting firm, A way with words, and can be reached at lynnemeyer@cox.net.
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By Anita Campbell | Permalink |
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Saturday, May 07, 2005
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The 7 Irrefutable Rules of Small Business Growth
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Steven Little's book, "The 7 Irrefutable Rules of Small Business Growth," should be on the reading list of all small business owners and anyone who follows the small business market.
I loved this book! The reason I loved it? The book elevates the view of the small business owner.
It is really a strategy book for small business owners. The author urges small business owners to step back and look at the big picture if they want to grow.
His premise is that opportunities and answers are not just within a company, but external also. Or as a mentor of mine used to counsel, "don't focus inside the four walls of the business, look outside."
This is an easy-to-read book. The cover features a testimonial that says of the author, "Steve is a true story-teller." If you are like me, you probably take book testimonials with a grain of salt. But this one gives an accurate picture of what to expect. Steven Little is a story-teller and he keeps it interesting with real-life examples.
One such example in the book involves the tale of two rope making businesses. One focused on growing a plant -- henequen -- and making natural-fiber rope from it. The other defined its business more broadly, as providing ropes of any materials for the shipping industry. The business that focused narrowly on henequen saw demand for natural-fiber rope decline dramatically, and is now at a mere fraction of its one-time peak. The business that saw itself in the context of a world that was changing, with new technologies, and focused on meeting its customers' needs, changed with the times and now manufactures rope made of synthetic materials. It is thriving. It's this kind of example that drives home the author's points and keeps you turning the pages.
The most unique part of the book is the chapter on seeing the future more clearly. In fact, it's Rule #7 of the book's irrefutable rules.
The author talks about the need to listen to "weak signals" around you of what is happening: new ideas, new styles, new products. He even suggests that every business owner needs to read 50 magazines a month (or web sites, newspapers, research reports, or other sources of information).
Although he doesn't use the word, in essence, he says that every business owner needs to be a trendspotter. Why? So that they can forecast their companies' next moves.
This passage from the book explains it best:"Most successful, growth-oriented entrepreneurs I know are voracious gatherers of information. By combining their own internal trend data, their external scanning efforts, and understanding of potentially disruptive weak signals, they are prepared to take their forecasting to the next level." Be sure to read the companion guest column by Steven Little, Using "Weak Signals" To Identify Opportunities, which illustrates more of Rule #7 in the book. Bottom line: Read this book. You will get good value from it. If you are into mixing business and pleasure, it's even engaging enough for summer reading on the beach.
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By Anita Campbell | Permalink |
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Friday, May 06, 2005
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Using "Weak Signals" To Identify Opportunities
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Editor's Note: We're very pleased to bring you this guest column from small business authority Steven Little. He talks about how successful small businesses grow through keeping their ears to the ground for "weak signals" about the first signs of emerging trends -- in other words, by trendspotting.
By Steven S. Little
If you want to grow your business, you need to see the future.
If you want to know what's coming, you need "outstanding market intelligence." This is your organization's ability to first recognize and then adapt to fundamental change happening in your company, your industry, and your community. You need to take the time to regularly consider the macro forces of change in the world as a whole.
So what can you do to stay on top of the changes happening in your industry and your world?
Internal vs. external focus
Let's start with focus. Most business owners are great at internal focus. Knowing what is happening inside our own companies is one of the strengths that allow us to effectively compete with bigger businesses (because often, they aren't very good at this.)
However, we also tend to get mired within our insular view, and we ignore the importance of external focus. This is where big business, with their research budgets and market analysts, can often get the best of us.
Finding the right balance between internal and external focus is a common trait among smaller business that achieve sustained growth. It is especially true of successful service-based businesses, which understand not only their own world, but their customers' worlds as well.
Another common barrier to growth I see among privately-held businesses is the inability to recognize and act upon subtle (or micro) changes in markets that lead to macro changes. Experts call these subtle changes "weak signals." Even to the experienced owner or manager, these weak signals can often be dismissed as anomalies. To the growth-oriented manager who regularly considers the macro forces, these signals are seen as noteworthy data points. They represent potential opportunity and may require immediate action.
I knew one growth manager who understood these types of signals very well. My wife had an uncle who recently passed away. Uncle O, as we called him, was in the music recording industry for his entire career. He started out as a small owner and eventually became president of one of the world's largest recording labels. He had successfully navigated the turbulent and confusing world of pop music from the late '50s through the early '90s.
In the two years before he died, I spent considerable time with Uncle O. While he shared a lot of compelling stories, I was most interested in understanding his uncanny ability to capitalize on the rapid rate of change in his industry. More than any business I know, the pop music business is made up of seemingly well-entrenched "rules" of what makes money that are overthrown on a regular basis.
Consider the rapid rate of change in Uncle O's industry. Everything -- from the industry's distribution systems to the media formats sold to the styles of music people buy -- changes quickly and completely. The only thing that stays the same is the rapid rate of upheaval. Uncle O maintained that his success stemmed from an ability to see the periphery of a changing market more clearly than his competition.
Weak signal monitoring
Though he never used the term, Uncle O was an early practitioner of weak signal monitoring. Here are a few rules of weak signals that I learned from listening to Uncle O:
- The more irreverent and upsetting a new idea is to the status quo, the more chance it has of reaching a level of macro importance.
- The more often you hear, "That's just a fad," the more likely it's not.
- Identifying and monitoring weak signals should be an ongoing, systematic process in any organization interested in sustained growth.
- If you hear about a new "thing" in a popular magazine or on television, you are probably too late to capitalize on it.
- Weak signals often grow by joining forces with other weak signals. Or, in other words, weak signals often need reinforcement from other ideas floating outside the established boundaries before they can be seen or heard.
As a manager and a business leader, Uncle O believed his focus should be on the future. He estimated that, in his most productive periods, he was spending 75 percent of his time on identifying, monitoring, developing and re-tooling initiatives designed to meet tomorrow's opportunities. Overseeing the issues surrounding the day-to-day activities of today's opportunity was something he could delegate with confidence.
Interestingly, it has been my experience that too many business owners spend the majority of their time on today's issues (or even yesterday issues), while managers of growth organizations always have their gaze firmly fixed on tomorrow.
To Uncle O, managing a current "hit" was relatively easy. Attempting to identify the next big thing is where he brought the most value to his organization.
* * * * *
Steven S. Little is a leading authority on business growth. Formerly president of three fast-growth companies, he is now a much sought-after speaker, writer and a Senior Consultant for Inc., the magazine for growing companies. His new book "The Seven Irrefutable Rules of Small Business Growth" was published by Wiley and Sons in February 2005. For more information, visit his unique website at www.stevenslittle.com.
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By Anita Campbell | Permalink |
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Thursday, May 05, 2005
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Women Business Owners Want Association Health Plans
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A recent poll released by WIPP (Women in Public Policy) says that health care is the top issue concerning U.S. women business owners today. And Association Health Plans may be the answer to small businesses' health insurance problems, they think.
To put this survey in perspective, remember that it is a public policy survey. So the questions were about issues that can be influenced by legislation and desired change at the Federal level.
The survey represents small businesses. It covered over 500 women in business, of which 98% have under 100 employees.
The top issues the women see are health care, energy, social security reform and tax reform -- in that order. When it comes to health care, here is a chart showing the solutions they would like to see implemented:
Isn't it interesting how the overwhelming majority (84%) of those surveyed want a complete overhaul of the health care system? That tells you how messed up most think today's system is. Of course, we all know an overhaul is not likely to happen anytime soon.
The next best option, with 72% support, is to make Association Health Plans available.
Association Health Plans would allow trade associations and other groups to make health insurance plans available nationwide for their members. Today, health coverage in the U.S. cannot be provided by associations across state lines. Nationwide association plans would give groups of small businesses more buying clout when it comes to health insurance plans. More information can be found at the NFIB's website for Association Health Plans.
Read the detailed WIPP women business owner survey results here.
Hat tip to Kirsten at re:invention for the survey link.
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By Anita Campbell | Permalink |
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Monday, May 02, 2005
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HP Survey: 10% of Small Business Marketing Plans Include Blogs
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Ten percent of small business owners in a recent study reported that they have included blogs in their marketing plans. And 16% plan to invest in blogs over the next 2 to 3 years.
This is from a study of small business owners that HP announced last week. The study was conducted by Harris Interactive in March of 2005, and was part of HP's activities during national Small Business Week. I was pleased to participate in discussions about the Harris/HP study results.
The HP study covered a wide variety of topics. It's an interesting study on a number of fronts, and I will be writing more about it.
But right now I want to focus on the information about small business blogs.
Of course, no actual count of business blogs today exists. But the number in the HP survey, suggesting how many business owners' marketing plans and future plans include blogs, is quite interesting, especially when you compare the numbers with those whose plans include websites. When you consider that not quite half of the small businesses surveyed even have websites, the fact that 10% are including plans for blogs is pretty remarkable.
I created the following charts with information from the HP survey to better see the comparisons (click each for larger image):
Note that more women surveyed have incorporated business blogs into their marketing plans than men. There could be several explanations for this. I find the data notable because it goes against a Pew Internet study suggesting blogs are male-dominated. That appears not to be the case when it comes to small business blogs. Bloghercon organizers take note.
So what are the business implications? (NOTE: the following are my own thoughts, not part of the survey results.)
For all my friends out there who are blog consultants, it sounds like there will be plenty of work to go around. Small business owners will be looking for affordable help to set up blogs and learn the ropes.
Web design firms need to incorporate weblogs into their offerings. Partnering with blog consultants could be a good marriage, since blogging is such a different animal from a typical business website. Let the blog consultants worry about the unique marketing aspect of blogs and training clients how to use them. The design firms can focus on what they do best: customizing the designs, actually building the blogs, and integrating them with businesses' commercial websites.
SEO firms also figure in this mix. As the number of business blogs grows, it becomes harder to stand out. Search engine optimization (SEO) for blogs will become important just as it is for websites.
For businesses providing blogging software and blog-related services, targeting business bloggers could be an excellent niche. Today's offerings are poorly suited for business blogs. Key features to include in future offerings are:- ability to set up categories and excellent built-in search functions, so that business information can be found more easily -- chronological archiving is better for personal diaries and not very useful for business blogs
- features that are more like commercial websites, including "About Us" sections, press room pages, and better navigation functionality
- easy ability to build customized RSS feeds for individual pages such as press rooms
- search engines that target business blogs specifically
- plug and play integration of eCommerce features such as product catalogs and shopping carts on sidebars
Laptops will be ever more important to small business owners who blog. I've noted before that magical connection between blogging and coffeehouses...must be something with the caffeine.
What are your thoughts?
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By Anita Campbell | Permalink |
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Sunday, May 01, 2005
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PowerBlog Review: Better Local Marketing
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Editor's note: Welcome to the sixty-third in our regular weekly series of PowerBlog Reviews of business weblogs.
"Virgin" Blogger Gets It Right By Lynne Meyer
Kevin Stirtz, president and publisher of Coffee News Twin Cities, Burnsville, Minnesota, USA, is very new to blogging. In fact, he's a veritable "virgin" at it, having just started three months ago -- on February 2. New to blogging or not, however, in my opinion he gets it right.
Truth in advertising is a rare these days. That's why what you'll find at the Better Local Marketing blog is so refreshing. True to its name, the contents really are all about better local marketing, with tons of real-world tips.
Beyond his own considerable experience as a small business owner, Kevin regularly talks to other business owners, tapping into what works for them for local marketing and what doesn't. "Far too much marketing is done by shooting from the hip or is based on how good the local advertising salesperson is," he notes. "All too often, small business owners make decisions about their marketing with little or no good information."
Kevin adds, "I really hate seeing people throw money away on marketing that does them very little good." So he started his blog to share the information he has gleaned about better local marketing.
While Kevin's blog contains lots of good information about what works, he's also not shy about telling readers what doesn't work. In his March 28 posting titled Affiliate Programs Don't Work in the World of Local Marketing, he describes an "offer" a local retailer brought to him to become an affiliate of their store. "This type of deal fails to pass muster in several ways," he says. Concluding that "the deal fails what I call 'the business model test'," Kevin warns, "I won't do business with someone who wants to pay for just a small part of the service I'm providing. Neither should you."
By reviewing his many examples of successful marketing techniques, as well as abysmal marketing blunders, small business owners can save themselves money, time and headaches. Kevin makes postings to his blog several times a week, and he's generous about sharing web sites, other blogs and articles he finds valuable. In addition, he provides links to what he considers to be good marketing resources. One such link is to -- surprise -- the U.S. Postal Service.
Kevin even uses popular TV shows to provide pointers. In his "Marketing Lessons from 'The Apprentice'" posting, he points out and analyzes what the winning team did right and why the losing team bombed, resulting in Donald Trump pointing his finger at one of them and saying "You're Fired!" (To his credit, Kevin demonstrated tremendous restraint by not commenting about "The Donald's" comb over.)
And talk about value added! Kevin enables readers to purchase, download and print out the 21-page guide -- "Five Minute Marketing" -- he developed for a local marketing course he teaches. And check this out. Beginning mid-May, Kevin will be hosting monthly workshops on "Improve Your Marketing" at a local coffee shop.
Bottom line -- I've bookmarked Better Local Marketing, and you should, too.
* * * * * -- Lynne Meyer, APR, is a regular new resource here at Small Business Trends. Lynne is a senior public relations professional with more than 25 years of experience in all aspects of marketing communications, including writing, media relations, strategic communications planning, special events and crisis communications. Lynne is president of her own marketing consulting firm, A way with words, and can be reached at lynnemeyer@cox.net.
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By Anita Campbell | Permalink |
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More news... more trends... more insight... |
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