In this week’s video I talk about the details of why small businesses are showing low profits.
Monthly Archive for July, 2013
With America’s 2013 Independence Day now over, what do you think about the future?
19% - The U.S. is, and will remain, the greatest nation in history.
67% - U.S. greatness is in peril, but there is still time to recover.
14% - The U.S. has had its day and is in an inevitable decline.
As Americans look back on the 237-year history of the United States since declaring independence from Britain in 1776, we can point to many peaks and valleys along the way.
Today there are many national issues being debated. And, emotions are high enough on certain issues that it is not uncommon to hear the existential question asked, “Are America’s best days behind us?”
We wanted to know what our small business audience thought about this, so in our online poll last week we asked: “With America’s 2013 Independence Day now over, what do you think about the future?” Here’s what we learned.
Almost one-in-five of our respondents were optimistic by choosing this option, “The U.S. is, and will remain, the greatest nation in history. A slightly smaller group offered the opposite prediction, “The U.S. has had its day and is in an inevitable decline.” But just over two-thirds of our sample seems to be pragmatic optimists by declaring, “U.S. greatness is in peril, but there is still time to recover.”
Paraphrasing a line in the 1949 movie, “The Third Man,” generations of strife in Italy produced Michelangelo, Leonardo da Vinci, and the Renaissance, while hundreds of years of brotherly love in Switzerland produced the cuckoo clock. America is known for its brotherly love, but ours is more like the kind you find in most families: lots of love mixed with lots of fighting.
But there is one area that is the most troubling: Our increasing dependence upon government to solve our problems. This trend is eroding the very unique American alloy that was forged from characteristics like fierce independence, self-determination and individual responsibility, beginning in 1619 with the Mayflower Compact.
We can debate, disagree and even fight over certain issues, but there will be nothing to fight over if America devolves into socialism. We already know how that movie ends, because it has been playing out in front of us for a few years now in the European Union, and closer to home in cities like Detroit.
As of now, there are entities with resources to help these profligate governments. But as the U.S. national debt tops $17 trillion and deficit spending projected well into the future, we have to ask ourselves this question every time we spend money we don’t have on things that we refuse to fix, “Who’s going to bail out America?”
It’s not too soon to start asking that question.
For 10,000 years, business leverage has come from three asset categories, shown below in chronological order of appearance:
- Muscle power: human or animal
- Tangible stuff: raw material, buildings, inventory, machines, etc.
- Intangible stuff: Patents, trademarks, copyrights, trade secrets and other intellectual property
For most of history, business power was heavily weighted on the first two categories. First the strongest caveman and biggest horses had the advantage. Later the fastest ships and largest factories got the jump on lesser competitors. For a small business it sounded like this: “We have the largest inventory in the tri-county area.”
But, as revealed in a study by IP attorney Kenneth Krosin, intangible assets became a powerful force in the latter third of the 20th century. Krosin discovered that at the end of the 1970s, corporate balance sheets were represented by 80% tangible assets and 20% intangible. But in 30 years, by 1997, the ratio of assets had essentially inverted to 73% intangible and the rest tangible.
Here’s what small businesses should take away from the breathtaking explosion of IP revealed by the Krosin study:
• The power of IP is no longer the wholly-owned franchise of big business.
• For centuries intellectual property provided only a marginal advantage even for big business, but has become a two-edged sword – one edge provides opportunity for those who leverage intangible assets more and tangible less, and the other edge delivers disruption for those who don’t.
• Exciting Internet resources and other digital innovations are converging and coalescing in front of our eyes to make intangible assets a much more powerful lever for all businesses.
• IP in the form of digital assets has evolved from two-dimensional tools, like websites, to add the third dimension of a virtual marketplace in cyberspace, aka The Cloud.
• Just because a small businesses may never reach 73% intangible assets doesn’t mean it shouldn’t have an IP strategy.
• Your IP strategy should include acquired intangible assets, like software, as well as the kind that you create, like a business process you maintain as a trade secret.
In The Age of the Customer, a small business must have an IP strategy that’s born from the acknowledgement that it is integral to the performance of virtually every talent and task in your business, and required to maintain marketplace viability.
What does your IP strategy look like?
Listen to my latest segment on The Small Business Advocate Show® where I talk about the history of business assets, how intellectual property has become the greatest business lever of all the asset classes and why you need an IP strategy. Click below to listen.
16% - We’re doing our part - we’re hiring now.
9% - We want to hire, but can’t find qualified people.
50% - We’re not hiring because we’re not growing.
25% - We’re not hiring because we’re afraid of Obamacare.
As of this month, the Great Recession has been over for four years. The success of the U.S. economy is more dependent upon small business owners more than ever before. And yet, our poll shows that 84% of small businesses are still reporting they either can’t or won’t hire now. What could cause the business energy of these pathological optimists to be so repressed?
Only one thing could produce that much negative energy: anti-business policies from the political class in Washington. I’m going to have more to say about this in an upcoming Feature Article. Stay tuned and thanks for participating.
In this week’s video I talk about you should be leading your business. Should the 21st century management model look more like a partnership or dictatorship?
One of my favorite books is The Words Lincoln Lived By, by our good friend and Brain Trust member, Gene Griessman. That’s where I found this Lincoln quote about tenacity: “I expect to maintain this contest until successful, or till I die, or am conquered, or my term expires, or Congress or the country forsakes me.”
Sound familiar? If you are a small business owner, I bet it sounds very familiar. It might even give you a little chill when you read those 140-year-old words. you know, hearing the essence of your being translated into the spoken word in a way in which you may never have actually spoken it out loud.
As an Army officer I was taught to be responsible for everything my unit did or failed to do. In small business, and you’ve heard me say this before, “You turn the lights on, you turn the lights off. Whatever it takes.”
Tenacity. I sure do like that word, and I admire tenacious people. Are you tenacious? The tenacious have the courage of their convictions. Courage, period. Passion. A strong spirit. Maybe even an indomitable spirit.
If you are a small business owner you know how far down inside of you that you have to reach to rise above all of the challenges, train wrecks and surprises that are thrown at you. Sometimes deeper than you knew you could. Testing your mettle. I don’t care what anybody says, astronauts are heroes, but they don’t own the franchise on “the right stuff.” Small business owners have it, too.
I am so proud of you.
Follow the link below to listen to my latest interviews with Gene Griessman.