economy

Economy Benefiting Greatly from Small Businesses

December 28, 2011 by Zack Duncan Leave a Comment

It’s no surprise that our economy is in rough shape. But one of the things that has helped keep our economy from completely hitting rock bottom is the role small businesses play in it. Over the past few years, small businesses have contributed a lot to the U.S. economy in a very positive way.

According to Rural and Agribusiness Enterprise Development Specialist for the North Dakota State University Extension Service Glenn Muske, “Small businesses have been noted as being the source of most new jobs and the core of economic growth. As the U.S. slowly moves out of the recent recessionary period, small businesses again are being looked to as drivers of future growth.”

The Kaufman Foundation, located in Kansas City, Missouri, just released new information regarding the vital role that small businesses are playing in the economy. The report specified that younger firms (ones that are only 1 to 5 years old) generated almost two-thirds of the job growth in 2007. What’s more, even though only 50% of the new firms last for 5+ years, the ones that did make it through generated 80% of the job growth.

The importance of small businesses to the economy is becoming more and more prevalent. Now, three-fourths of U.S. adults believe that a sustained economic recovery will require strong entrepreneurial and small business activity. Over half of the companies named in the Forbes Fortune 500 list in 2009 were started during the recession and new businesses continue to open every day. And even though growth slowed in 2010, nearly 500,000 new businesses opened every month.

Characteristics of these business owners differ, though the highest rate of business startups has been among people ages 55 to 64 with the slowest being among people ages 20 to 34. It is still impossible to determine the effects of the recession on these numbers though early indications are showing that more young people are starting jobs while older individuals are the leading creators of business startups.

According to Muske, “Many potential business owners hesitate starting a business for one of two reasons: They are afraid of failure or want outside financing. Regarding the failure aspect, many of today’s businesses were started by people who failed in earlier business attempts. And these owners will say that they have continued to make mistakes as the business grew. Not wanting to fail often is an indicator of not trying new things. Yet today’s rapidly changing world demands that the owner continually change his or her business model.”

Source: The Jamestown Sun – Small businesses playing big role in economy

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How to make your business more appealing to new and existing workers

May 25, 2010 by admin Leave a Comment

Right now the economy sucks; there is no other way to say it. Yes, the political spin mongers are out there telling us about how rosy it is supposedly getting, but I like that old Mark Twain quote “There are lies, damn lies, and statistics,” (thanks to : Mark Twain. (n.d.). BrainyQuote.com. Retrieved May 25, 2010, from Brainy Quote: http://www.brainyquote.com/quotes/quotes/m/marktwain128372.html)

The thing is that this recession shall pass, and American business will go on-changed but persevering. At that time, American employers will need to concentrate on keeping and attracting new workers. One thing the American employee has learned from this recession is that they work far too much and enjoy far too little off time compared with the rest of the world (who view Americans as people who work themselves to death).
Here is a wonderful article on the issue: http://users.ipfw.edu/ruflethe/american.html

A company that I worked for seven years had a great incentive and they really didn’t realize it: Every year the business shut down for Christmas week (the week between Christmas and New Years). In a company that demanded a lot from its workers it was one thing that kept the standard front line employee from wandering off to other endeavors even though the company was very stingy with raises and was not the gold standard as far as benefits. The entire week was paid for by the employer.

Other ideas are comp time, 37.5 hour work week, summer business hours, and flex time. One thing I did when I lead a sales team was stagger the work week. On Monday morning we were in at 7am and generally worked until 6, but on Friday we came in at 8:30 and left at 3; in fact, if I saw Jr. sales reps or sales assistants in their cubical after 3:30, I officially kicked them out of the bull pen turned out the lights and locked the door. As a manager, HR wondered why “my people” were so loyal-gee it wasn’t that hard. Needless to say if I ever needed to ask for overtime from someone, it was cheerfully accepted, and I avoided asking very often and my sales people knew it.

Other things I have seen effective were buying the first round after work on Friday night at the local watering hole, giving a hard working but seldom recognized employee the company business card and saying, “take your wife-sweetheart out to dinner and a movie-companies buying (every thing but alcohol).”

Implement these ideas now, and when the big loosening of the economy comes you won’t find your business trying to lock the door’s to keep everyone from leaving. I have seen it from the other side as well, a company who sort of enjoyed being demanding, when the economy loosened they could not effectively conduct business, they did not have enough front line people. Also the growth of job sites like www.glassdoor.com are becoming a very usual part of a person’s job search, and you don’t want your company to be poorly rated here if you want to attract new employees.

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The business Outlook: It’s Starting to Look Better

March 21, 2010 by admin Leave a Comment

Sorry to spoil President Obama’s parade but the most important issue for average Americans is not healthcare. It is very important but it not number one. Number one is the American economy and more importantly job stability. Can you find or keep a job? Some of the economic news is depressing. American’s still aren’t spending much money on durable goods, and soaring credit card debt is the proverbial other shoe to drop on the economy.

It’s not all gloom and doom however. An important but little known index is rising and that it is good news-the index is the Baltic Dry Index. What this index does is measure how much it would cost to ship basic raw materials and the Baltic just hit a two month high according to transportationweekly.com. This is especially good news since it measures what might be in pipeline for the future to affect other indexes like the PMI (Purchasing Managers’ Index) which measures new orders, inventory, supplier deliveries, and production levels amongst other things.

So is it time to go out and invest in growth stocks or buy a new sports car? I wouldn’t go that far, but it might be all right to go ahead and send your kids to camp. Before orders can be produced, and people brought on to work those orders, someone in purchasing has to buy the raw materials to start the process, and nothing is final until the product ships. Well, good news, basic raw materials are shipping and its time to look at some of the other reports with a little more optimism!

Make Your Customers Pay

December 15, 2009 by Sarah Leave a Comment

When you are a small or medium business, a few customers not paying for their products and services could be very detrimental. Unlike larger companies who can afford the occasional delinquency, every penny counts, especially at a time when many SMBs are struggling to stay afloat. And with the economy still trying to improve, chances are your customers aren’t paying or are requesting extensions on payment deadlines.

As a matter of fact, according to the American Express OPEN Small Business Monitor, at least 60% of business owners are currently experiencing cash-flow issues and about 26% are worried about customers paying bills on time. There are ways to handle this that involve collection agencies and attorneys but those can be costly and just as much a hassle for you as they are the customer. Before you hire a third party or seek legal action, there are a few other things you can do.

First of all, you should probably start checking a customer’s payment history. So many businesses do this these days and for good reason. For a reasonable price (as little as $3.00), you can get some credit and payment history information on a customer before you agree to do business with them. Even if you don’t want to check the credit history, ask around. See if your customer has dealt with other people in your industry and find out what their experience was like. This method allows you to weed out anyone you might see as a high-risk and gives you more information about just who you are dealing with.

Another way to ensure prompt customer payment is to make it easy for the customer to pay. Offer variety and let the customer choose what payment method he or she is most comfortable with. Maybe you offer Paypal but you don’t Google Checkout. Consider signing up for that, too. Bill Me Later is another great option that customers can use. And whatever outlets you decide on, make sure a customer can pay via credit card, checking account, or any other method they may need to use. Also, don’t forget to make your payment options clear. Feature them on the homepage of your website or talk to your customers about them up front.

One last idea you can use to prompt your customers to pay on time is using mobile devices. Equipping whomever will be accepting your payments with a cell phone or Bluetooth device that will swipe credit cards is a convenient idea for customers who aren’t always carrying cash with them.

SMBs: Drive Sales & Get Noticed This Holiday Season

November 23, 2009 by Sarah Leave a Comment

According to the Constant Contact Annual Holiday Survey, 52% of small businesses, who participated in the Small Business Holiday Outlook Survey, expect their holiday season sales to improve over last year. Last year, only less than a third of business owners were as optimistic. Constant Contact, a leading provider of marketing and survey tools for small organizations, said that many respondents expressed overall optimism about the state of the economy.

If you own a small or medium-sized business, chances are you are anxious about your own holidays sales, regardless of what your outlook on the economy is, here are some tips and recommendations for improving your sales and getting your company noticed, this holiday season:

1. Get Your Customers Involved – Survey your customers to find out what they’d like to see go on sale and use social media outlets such as Twitter and Facebook to reach customers and potential customers. If you decide to let a popular vote determine your sale products, chances are customers will pass the word along to friends and family who can also vote, in turn, getting the word out about your company.

2. Brand Yourself – Make sure you have a good company logo and use it everywhere, along with your name, message and tone. Consistency in communication is key and will help reinforce your brand.

3. Link Yourself – Have a company website? Company Blog? Company social networking accounts? If not, consider getting them and putting a little time and effort into them. Customers will use them to find out more about your company.

4. Host a Holiday Event – Show your customers how much you appreciate them by hosting a holiday-themed shopping event with discount incentives. Make sure you market and promote your event via social networks and other outlets.

5. Don’t Forget Last-Minute Shoppers – They’re out there. Don’t stop marketing a few days before Christmas. Many people wait until after the holiday to their shopping, in hopes of getting great deals and customers are usually loaded with Christmas money or gift cards after the big day.

6. Remember Why You Stand Out – Do you customers return because of your excellent customer service or because you offer services that other businesses do not? Remind your customers of that every chance you get, through emails, your website, and any other marketing tools you use. Remember, not every customer is looking for the best deal.

Small Businesses Are Borrowing Again

November 23, 2009 by Sarah Leave a Comment

SMB owners are borrowing money again, or so says a study conducted by PayNet Inc for Reuters. The study found that smaller “microcompanies” are gaining confidence in their business and enjoying an overall improved financial health, which is good news for the economy. These businesses are often thought of as the best hope for job creation during economic recovery.

According to the study, which examined loans, leases, and lines of credit activity, businesses with less than $100,000 in outstanding debt are borrowing cautiously to invest money into their own companies. Financing originations are still down but they are no longer failing faster than the originations for larger small businesses (or those who have debt totalling above $100,000). This is an improvement over the last three years.

“This looks like an inflection point,” William Phelan, the president of PayNet, said of the study. “These little businesses are a leading indicator and the signals they’re sending are improving.”

Another encouraging sign is that delinquencies among these companies peaked at some point during the spring of this year, but have since began to improve. Phelan says a correlation can be made between microbusiness borrowing delinquencies and GDP and that makes for another encouraging sign.

Currently, most recovery efforts have come from a government stimulus effort, including the auto industry’s “cash for clunkers” and $8,000 tax credits fro first-time home buyers. But experts say a true recovery must come from private industry and customer demand, particularly small businesses.

And while critics have blasted banks who received government bailout money for not turning around and investing the money into the economy, several big banks have recently announced plans to do more small business lending. These institutions include Citigroup, J.P. Morgan, and Goldman Sachs.

PayNet provides risk management tools to the commercial lending industry. The company collects real-time loan information, including orginations and delinquencies, from over 225 leading U.S. capital equipment lenders and its proprietary database encompasses more than 16 million old and new contracts worth about $700 billion.

New Q3 SMB Survey Findings

September 12, 2009 by Sarah 1 Comment

Even though small and medium businesses (SMBs) are trying to save every penny in the current economic climate, a new survey from Spiceworks, Inc. – a developer of network and systems management software and market research company located in Austin, Texas – shows that a majority of businesses intend to purchase hardware and software within the next six months. The Q3 survey was designed to look at technology purchasing and staffing trends among SMBs all over the world. The survey took place over the months of July and August by Spiceworks’ Voice of ITTM market research program. Of the 1,130, the majority were IT professionals that support companies with fewer than 500 employees and with annual technology budgets of about $108,000.

Here are some of the findings from the survey:

SMBs are letting their desktops, laptops, and servers last them ten more months than normal before purchasing new ones
68% of SMBs plan to add new hardware to their networks in the next six months; this includes 56% buying desktops, 55% buying laptops, 45% buying new servers, 31% buying new printers, 27% buying new network devices, and 13% buying notebooks
The average new order consists of 13 desktops, 10 laptops and two servers
At 37%, new hardware makes up the largest part of SMB IT budgets
51% of businesses are planning to buy new software. 32% of that will go to security and anti-spam solutions software. Of those, about one third plan to buy cloud-based security and anti-spam offerings.
44% of SMBs are using virtualization solutions. 21% of SMBs’ total server capacity is currently virtuatlized, but over the next six months, 30% plan to expand virtualization in their networks.
25% plan to purchase backup and recovery items within the next six months. Of those, 75% plan to store date on-site and the remaining 25% plan to utilize cloud-based storage. 42% of date will be stored on network-attached storage or storage area network devices; 38% will be stored in local and direct-attached storage; 7% will be hosted off-site; and 13% on tape or other media.
57% of SMBs currently use a cloud computing service. The three most popular include anti-spam, hosted email, and online back-up.
As expected, budgets shrank in 2009. 39% cut their budgets (averaging cuts of 22%), 31 kept their budgets the same, and 30% grew their budgets (averaging growths of 27%).
60% of SMBs had to cancel at least one planned 2009 project due to the economy
As far as hiring goes, 22% of SMBs plan to hire additional full and part-time staff. Only 3% plan to reduce their staff size.

In a statement, Jay Hallberg, co-founder and vice president of Marketing for Spiceworks, said it’s good to see SMBs showing signs of growth and spending, “Most are clearly ready to buy and it will be interesting to watch how these plans play out among different geographies, industries and company sizes. We will track these and other technology trends of interest in future studies.”