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  • Monthly Archive for September, 2011

    The Blame Game

    Recently, in the Small Business Advocate poll, we asked this question: Who do you think is most responsible for the current state of the U.S. economy? Here are the results:

    27% - Congress

    18% - President Obama

    55% - Both

    Jim’s Comments:

    Lately, we’ve been asking what you think of President Obama’s attempts to create jobs in America. Some of our audience members said, “Hey, you’re picking on Obama - what about Congress?”

    Well, there are at least two reasons why we don’t think we’ve been picking on the prez:

    1. He’s the president. It’s his watch. He asked for the job. To paraphrase President Truman, he occupies the desk upon which the buck stops.
    2. He has put his jobs plans right out there, expending a lot of words and taxpayer money on various jobs programs of which he has taken full ownership.

    Nevertheless, we do agree that Congress shouldn’t be left out. So last week in our online poll, we asked this question: “Who do you think is most responsible for the current state of the U.S. economy?” Here are the results.

    All by himself, President Obama did better this week, with only 18% of our voters putting all of the responsibility for our troubled economy on his shoulders. The 535 occupants of the big building on the other end of Pennsylvania Ave. faired a little worse, with 27% of our respondents blaming Congress.

    The big number was reserved for Team Politic. More than half of you said both the president and Congress were to blame for the economy, which includes the worst sustained unemployment conditions in generations.

    I’m not trying to be controversial, but with these kinds of numbers so close to the next election, and with the economy not expected to improve dramatically over the next 13 months, I’m predicting a major housecleaning in all three houses. Not along party lines, but along the lines of the political class - members of both parties who have long forgotten what they were sent to Washington to do and who they were sent to represent.

    For my part, it’s about time.

    I talked more on The Small Business Advocate Show about who is to blame for our current economic troubles. Click here to listen or download what I have to say, and while you’re there, see what other people are saying about the economy.

    Be sure to take this week’s poll HERE!

    Access other great SBA content HERE!

    The future is bright for niches

    Prospective owners of Craftsmen socket wrenches can choose from the classic, good, better or best models.

    The “Best” wrench has more notches, or teeth, inside the mechanism, allowing for finer adjustments when tightening a bolt or nut, plus in a tight spot, the extra notches make the Best model work, well, best.

    For the past 30 years, the marketplace has increasingly become like that “Best” socket wrench; every year, it acquires more notches. Except in the marketplace, notches are called niches (I prefer “nitch,” but some say “neesh” - tomato, tomahtoe). And just as more notches in a mechanical wrench allow for finer adjustments, niches create finer and more elegant ways to serve customers, which they like - a lot.

    As niches have increased in number, so have entrepreneurial opportunities, resulting in the most dramatic expansion of the small business sector in history. It’s difficult to say which is the egg and which is the chicken: Have entrepreneurs taken advantage of niche opportunities presented to them, or have they carved out niches where they saw previously unrealized opportunity? The answer is not either/or, it’s both/and.

    Webster defines niche as, “a place or position perfectly suited for the person or thing in it.” If ever a concept was “perfectly suited” for something, it is the niche and a small business. Indeed, as one small business owner identifies a new niche, another is creating a niche within a niche. It’s a beautiful thing.

    Rebecca Boenigk (Bay-nik) is the president of Neutral Posture, Inc., a Texas small business she founded with her mother to build office chairs. Rebecca told me Neutral Posture has been successful because they fill a niche - REALLY comfortable, ergonomically correct and not inexpensive office chairs - instead of trying to make chairs for every person and price-point. In the 21st century, Rebecca’s story is legion.

    In the future, there will be less mass marketing, mass media and mass distribution. But there will be more niches - lots of new niches. And while “mass” business models aren’t going away anytime soon, they won’t grow like niches. And that’s good news for small business and the future of 21st century entrepreneurship.

    More niches means a healthier small business sector, which I happen to believe is good for America and the world.

    Be the “BEST” by creating and serving niches.

    For more of what I have to say on The Small Business Advocate Show about the success of finding a niche for your small business, click here and listen or download.

    Access more great SBA content HERE!

    Beware the Concorde Fallacy

    In 1956, the Supersonic Transport Aircraft Committee met in England to discuss building a supersonic airliner by British aircraft and engine manufacturers and the government. The project - named Concorde - moved forward, and in 1962 France joined the group.

    When the wheels came up on the first Concorde commercial flight in January 1976, the enterprise was already plagued by prohibitive cost overruns. By the last Concorde flight in 2003, the Anglo/French financial misadventure had become legendary. The good news is it produced a handy metaphor that covers valuable business lessons.

    Evolutionary biologists coined the term, “Concorde Fallacy,” as a metaphor for when animals or humans defend an investment - a policy, business, or nest - when that defense costs more than abandonment and an alternative. Four centuries before Concorde, in Part One of Henry IV, Shakespeare’s Falstaff expressed it this way: “The better part of valor is discretion.”

    Here are two lessons associated with the Concorde Fallacy.

    1. The “sunk costs” lesson. When the financial viability of an enterprise is questionable going forward, any decision to continue should not be based on what has already been spent. The Concorde partners learned this lesson 27 years, and lots of taxpayer money, too late. For a small business, this sounds like, “We’ve got too much invested …” or “If we just work harder …” or “We just need more time …” When it’s not working now, you have to decide when to pull the plug.
    2. The “Pride goeth before destruction” lesson (Proverbs 16:18). Emotional attachment to Concorde, and sovereign pride of the English and French governments, caused the willing suspension of economic reason.

    In small business, pride can be a productive motivator - but it can also be the problem. A mentor once posed a handy question to me that I’m going to call the “Concorde Question, “Do you have a fighting chance or just a chance to fight?”

    Perhaps the hardest decision a small business owner ever faces is when to end a business pursuit, whether a new product, acquisition or - and this is the mother of all anguishing decisions - to close the business.

    The reason for the anguish is because for every entrepreneur who succumbs to the Concorde Fallacy and stays too long at the dance, there is one who pushed on, one more day, and found success. Being a small business owner isn’t for sissies.

    I talked more about lessons learned from the Concorde Fallacy on my radio program, The Small Business Advocate Show. Take a few minutes to click on the links below and listen. And, as always, let me know what you think.

    Beware the Concorde Fallacy with Jim Blasingame

    Lessons learned from the Concorde Fallacy with Jim Blasingame

    View other great SBA content HERE!

    Are you feeling the pain of peer-to-peer?

    How does your organization produce, share and secure digital information: peer-to-peer or server-based?

    Peer-to-peer means stand-alone personal computers for every employee, connected to each other – if at all – over a local network also delivering Internet connection. Each PC has its own programs, files, data back-up and security. File sharing is possible, but not elegant. This is a classic small business system because of how we start and grow: one employee and PC at a time.

    A server-based environment is the next level up. Growing businesses find that a server set-up provides more control over file management, sharing, back-up and security, plus efficiency when adding people.

    A server is to a PC what a pair of overalls is to a hand-tailored suit – rugged, utilitarian and plain. It comes with a central processing unit (CPU) and hard drive(s), and is designed to “serve” workstations. All programs, storage, back-up and security resides on the server, instead of at the desktop. And file sharing? Servers are born to share files like a thoroughbred is born to run.

    So how does a small business know when to make the leap from peer-to-peer to server?

    The rap on converting to server-based has long been that it was big business complicated. For a small business to jump to a server system, the peer-to-peer environment had to be so unproductive that the pain had to be worse than the conversion challenges. But here’s good news: Today you can convert before the pain becomes unbearable.

    For a few years now, technology companies have made server hardware and software much more adoption and user friendly for smaller companies, especially with the creation of something called a “server appliance.” This is a features-rich server with pre-loaded software designed to reduce conversion headaches. You just plug your new box into an electrical outlet and your network and, bada-bing, bada-bam, you’re server-based, baby, with central data back-up, security, file sharing – maybe even a phone system. Now, adding a new user is much easier than buying a new PC.

    Most providers of these small business-friendly servers distribute them through one of your neighbors, a local small business computer company. Contact one in your area and let them help you decide if it’s time to make the jump to a server platform and which system is best for you.

    Don’t let peer-to-peer pain get too bad before considering converting to a server.

    Check out more great SBA content HERE!

    A National Small Business Owners Day

    Some say Matthew Maguire is the father of Labor Day – others say it was Peter McGuire. Both cared greatly for an important segment of the marketplace, its workers.

    Regardless of paternity, such a day was first celebrated on Tuesday, September 5, 1882, in New York City, when members of the CLU took an unpaid day off to demonstrate solidarity and, of course, have picnics.

    In 1884, President Cleveland designated the first Monday in September as Labor Day and an official federal holiday.

    In 1898, Samuel Gompers, then head of the American Federation of Labor, called Labor Day, “The day when toilers’ rights and wrongs would be discussed … that workers may lay down their tools for a holiday … touch shoulders in marching phalanx and feel the stronger for it.”

    Alas, entrepreneurs aren’t organized like our unions, probably because we’re too busy making payroll. There is no official Small Business Day set aside by the government as a holiday to salute the few who do so much for so many; a day to honor the real marketplace heroes, small business owners.

    There actually is a small business week when the U.S. Small Business Administration recognizes the “creme de la creme” of entrepreneurs in America. But it’s not a federal holiday, and not always the same week each year.

    Small businesses represent over 98% of all U.S. businesses and produce over half of the U.S. $15 trillion GDP. Plus, we sign the FRONT of the paychecks of over half (70 million) of all U.S. workers. Let’s see: big deal on Labor Day; no Small Business Day. What’s wrong with this picture?

    So, what’s the answer? Let’s celebrate Small Business Day in a way no other national holiday has been established: on a Sunday, because that would create the least payroll expense. August is the month-of-choice because that’s when politicians are home on recess. This way they can practice casting their pearls before small business owners in preparation for eating barbeque with the workers on Labor Day.

    To paraphrase Samuel Gompers, small business owners deserve a day for which these signers-of-the-front-of-paychecks have their rights and wrongs discussed; that the small employers of our day may not only lay down their challenges for a holiday, but also touch shoulders in marching phalanx and feel the stronger for it.

    It’s time for a National Small Business Owners Day.

    For more great SBA content, click HERE!

    Small Business Advocate Poll: Browser Wars 2011

    Recently, in the Small Business Advocate poll, we asked this question: “You have many browsers options to choose from as you surf the Internet. Which of these browsers do you use most often?” Here are the results:

    24% - Firefox
    48% - Internet Explorer
    12% - Safari
    16% - Chrome
    0% - Other

    Jim’s Comments:

    Sometime in the spring of 1995, businesses and the public were allowed for the first time to post commercial HTML “web” pages on the Internet. If you remember those early days, you might enjoy being reminded that the browser you used was likely the Netscape Navigator.

    We didn’t ask too much of Navigator, we were just glad to have a piece of software that would give you better access to the information super-highway. Then, like most things, someone came along and tinkered with improving browser capability as folks began to see the power of this Internet interface.

    Of course, the Big Daddy of browsers is now Microsoft’s Internet Explorer, or simply “IE.” The reason IE reached the level of being the most used browser was due to it being bundled with Microsoft Windows operating system that was loaded on virtually every PC purchased in the last dozen years that wasn’t a Macintosh.

    Today, Internet users have an array of browser platforms to choose from, each with their own loyal users. In fact, it didn’t take too long after 1995 for the “Browser Wars” to start, which included International anti-trust cases.

    We wanted to know what browsers our listeners and readers use, so last week we asked this question: “You have many browser options to choose from as you surf the Internet. Which of these browsers do you use most often?”

    It was no surprise to me that the top vote-getter was Internet Explorer, coming in at 48%. But it must be noted that the size of IE’s dominance is diminishing.

    It was also predictable that Mozilla’s Firefox came in second, with almost one-fourth of respondents preferring this platform. Firefox users may not be the largest, but they seem to be the most ardent devotees of a browser, so much so that I like to tease them by calling them Firefox elitists, or snobs.

    Google’s Chrome browser came in with a strong 16% of our sample. Many people are drawn to all things Google. And Apple’s Safari came in last, with 14% making this choice. This number is likely up due to the growth of the iPad, which uses Safari as the default browser.

    On my primary computer, a laptop, I use IE most of the time and Firefox to a lesser degree. With my iPad I use what Apple loaded on it, Safari. I have never used Chrome.

    The good news is we have lots of browser choices, except with the iPad, which apparently only allows Safari.

    Be sure to take this week’s poll HERE!

    Access other great SBA content HERE!