Tag Archive for 'small business growth'

Take on the law of numbers with grit and fundamentals

Published
by
Jim Blasingame
on 11:29 am
in Entrepreneurship, Inspirational and Motivational and Management Fundamentals
. 0 Comments

A rabbit was being chased by a hungry fox. Running for his life, he hopped over a turtle as he made haste across a small stream. Tucking himself safely inside his shell — not wanting to become collateral damage in the rabbit’s emergency — the turtle inquired about his anxious neighbor’s prospects, “Hey, Mr. Rabbit. You gonna make it?” To which Mr. Rabbit replied over his shoulder, “I GOTTA make it.”

When small business owners wake up in the morning, they often feel like Mr. Rabbit. But why are so many operating so close to the edge of survival? Why is every challenge or opportunity so momentous? Why are their circumstances so much more dramatic than for their Big Business cousins? The answer is found in the law of numbers. Let’s look at just three key examples:

Customers
Big businesses have lots of customers, so losing one is usually not a big percentage of their customer universe. A small business’s customer universe looks more like a list, on which each name represents a much larger percentage of the total. Losing a sale or customer takes a bigger mathematical bite out of the future viability of any small business.

Employees
When an employee leaves a big business, there are probably three replacements ready to be promoted off the bench to that single assignment. But even if there is a bench on a small business team, it isn’t deep. And since there are more jobs to do in a small business than people to do them, every employee is a key employee who’s difficult to replace.

Capital
Big businesses are blessed with multiple capital options, including the equity and debt (bonds) markets. A small business is the stepchild of the capital markets – sometimes more like an orphan. Other than bank loans and whatever retained earnings that can be held onto after taxes, the best way to describe other capital acquisition options is found in the names of the twin brothers of desperation, Slim and None. And even when outside capital is found, it often comes at a prohibitive premium.

With the law of numbers and perilous percentages against them, translating into limited options, small business owners survive by calling on a special kind of “I GOTTA make it” resolve. But, alas, resolve alone isn’t enough. To overcome the reality of their numbers and operate with less desperation they have to combine their grit with a focus on operating fundamentals that address the exposures. For instance:

  • Customers: Know what each expects from you and deliver that within an inch of their lives. This is part of your special sauce and one of your advantages over a big business.
  • Employees: Hire only those who could one day be promotable off of your bench.
  • Capital: Build and maintain good relationships with at least two banks, and retain earnings like your business’ life depends on it. It does.

During The Second Punic War (218 BC), Hannibal crossed the Alps with 35,000 men and a squadron of elephants. When snow blocked their progress, scouts reported the way forward was impossible. Sensing disaster in the eyes of his men, and realizing that this was a test of his leadership, the great Carthaginian general is said to have uttered those words that small business owners say to themselves, and their people, every day: “We must either find a way – or make one.”

Write this on a rock … Like rabbits and generals, small business owners GOTTA make it with a combination of grit and fundamentals.

VIDEO: Acquire and create intangible assets for your small business IP Strategy

Published
by
Jim Blasingame
on 11:00 am
in Customer Care and Intellectual property
. 0 Comments

I recommend every business have an IP strategy, but how do you acquire those intangible assets for yours? You can think of both kinds of assets — tangible and intangible — as a new way to succeed and draw in customers. After all, it is the Age of the Customer.

Click on the link below or on the image to start playing the video.

Acquire and create intangible assets for your IP Strategy from Jim Blasingame on Vimeo.

RESULTS: Is your small business showing economic improvement?

Published
by
Jim Blasingame
on 11:28 am
in Economy: National and Global and Future thinking
. 0 Comments

The Question:

The NFIB Index of Small Business Optimism shows small businesses see economic improvement and hiring is up. What is your experience?
Photo courtesy of Wealthyauthority.com21% — Our business is improving and we’ll add employees this year.
55% — Our business is improving but we’ll handle it with existing people.
3% — We’re not growing but still plan to staff-up to pre-recession levels.
21% —  We don’t see improvement and won’t be hiring.

Jim’s Comments:

The good news is that three of four of our respondents are seeing economic improvement. The bad news is those who plan to hire number barely one in five.  This means that the growth being seen is merely an upward trend, not economic expansion.

Furthermore, the business owners I talk to say the current regulatory state, including the spectre of Obamacare, is causing them to make adding new people a last resort.

Thanks for participating.  Be sure to participate in our new poll below.

Is there a small business malaise?

Published
by
Jim Blasingame
on 7:00 am
in Business planning
. 0 Comments

Four years after the end of the great recession, the U.S. economy is still just limping along, with GDP growth lately averaging barely above 1%. With small business being the perennial producer of over half of the economy and jobs, we wanted to know how things are looking for our small business audience. So in our online poll last week, we asked “What are your business growth plans for the rest of 2013?”

Only one-fifth of our respondents say they are growing and in an expansion mode, while forty percent are growing, but not enough to commit new investment. Almost one-third report no growth and no investment, and seven percent say their sales are declining, necessitating a cutback of expenses. Here’s another way to look at this response: four out of five small businesses are not making investments in the future, including half of this group who’re growing but not investing.

As you may know, I report on at least two scientific surveys of small businesses each month on my radio program, plus a number of other quarterly and semi-annual polls. Our unscientific online poll on small business owners’ attitude about the economy is consistently very close to the results of the others, which show that even for small businesses that are growing, there is little excitement about the future. Where are the start-ups that have been the hallmark of past recoveries? Where is the entrepreneurial excitement and hopefulness that have become no less than an icon of the American dream and the emotional fuel of the dynamism of our economy?

My take on this is that, sadly, we’ve got at least three more years of this condition. As long as there is anti-business rhetoric, policies and regulations coming out of Washington, there will be what we called in the last half of the 1970s, a kind of malaise–a lack of hopefulness and dullness in the marketplace.

How do we recover? What can small businesses do? Irrespective of political party, we have to support candidates who are pro-business and pro-free markets–those who don’t think the government should be picking business winners and losers, and those who realize that the key to a vibrant and growing U.S. economy is a vibrant and growing small business sector. And then, when the election comes, we have to show up and vote for those people.

We’ll have another chance in 2014 and again in 2016. And frankly, with the damage that’s already been done, I don’t know how much time we have left. The next two elections are critical to the future of small business.

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Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

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Does the U.S. need another Jobs Council?

Published
by
Jim Blasingame
on 3:42 pm
in Economy: National and Global and Presidential policies
. 0 Comments

Unemployment just went up – to 7.9%. The economy just went down – negative growth in the 4th quarter 2012. Consumer confidence (Conference Board) and small business optimism (NFIB) both are down.

The government is experiencing annual operating deficits of over $1 trillion and the national debt, over $16 trillion, is on par with GDP. Let’s put that last number another way: if the U.S. were a business, it would owe as much as it sells.

With this set of realities facing our nation, it’s interesting that President Obama chose to say very little about the economy in his second inaugural address, but did talk about his climate change agenda. We wanted to know what small business owners think about the president’s priorities, so last week we asked this question in our online poll: “The President said climate change will be a major focus of his second term. What do you think?” Here’s what we were told.

Those who said, “I agree. Climate change is our greatest problem,” came in at 6%. The middle group, at 38%, believes the president “… should focus on economy recovery more than climate change.” And the rest, 56%, allowed that Mr. Obama “… should focus on the deficit and debt more than climate change.”

Clearly President Obama is watching a different ballgame than 94% of small business owners, plus we just learned that his Jobs Council was disbanded after two years. This 25-member committee is noteworthy because of the make-up of the roster: big business CEOs (16), venture capitalists (3), academia (1), politics (1), union bosses (2), and 1 – count them, ONE – small business owner.

That’s right, the group that signs the front of the largest batch of payroll checks (70 million) every week in America and has created almost every net new job for more than a generation was represented on the President’s Jobs Council by one very brave small business owner, Darlene Miller, CEO of Permac Industries, Burnsville, MN 55306. Permac has 30 employees.

Miller has been a guest on my radio program and recently told me she believes the Jobs Council actually did create jobs. But if that’s true, with more than 20 million Americans still unemployed or underemployed, shouldn’t it still be in business?

Well, the truth is the president doesn’t need a Jobs Council to create more jobs. He just needs to spend his efforts on policies that make America’s job creators think he’s watching the same ballgame as they are.

Small business owners will create more jobs when the government stops acting like it’s working against them.

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Recently on my radio program, The Small Business Advocate Show, I also talked about the lack of businesspeople in President Obama’s cabinet plus the failure of the Jobs Council with Rick Newman, chief business correspondent for U.S. News & World Report. Click on one of the links below to hear what he and I had to say. I’m also interested in what you think, so please leave a comment.

Why no business people on Obama’s cabinet? with Rick Newman

Obama is not watching the same ballgame as small businesses with Jim Blasingame

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!

Small Business Advocate Poll: Small Business Prospects over the Next Four Years

Published
by
Jim Blasingame
on 4:27 pm
in Government and Regulations
. 0 Comments

The Question:
Please tell us how you feel about the prospects for your small business over the next four years based on the influence of this one fact: President Obama has been reelected.

14% - This result will be good for my business.

68% - This result will not be good for my business.

16% - It’s too soon to tell.

My Comments:
For the past four years, we’ve polled small business owners about their prospects during and following the Great Recession. We’ve also asked what they think about President Obama’s policies. Based on our polling, as well as other surveys result I’ve reported on my radio program, the majority of small business owners are not pro-Obama.

Nevertheless, with Obama’s 2nd term now a reality, we wanted to know how small business owners feel about this, so in our most recent poll we asked this question: “Please tell us how you feel about the prospects for your small business over the next four years based on the influence of this one fact: President Obama has been reelected.” Here’s what we learned:

Those who said, “This result will be good for my business,” represented 14% of our sample, with 16% reasoning that, “It’s too soon to tell.” But the big group - 70% - allowed that, “This result will not be good for my business.”

As I predicted last January, I still believe small business owners will not hold up growth plans for four more years regardless of who wins the election, but our survey would indicate that they will pursue opportunities with great caution and judiciousness, which I fear will not contribute to rapid economic recovery in 2013.

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This week on The Small Business Advocate Show, I talked more about the new issues small businesses will have to deal with in the new normal of the next four years, including many new regulations, diminished privacy and U.N. influence. Click here to download or listen.

Check out more of Jim’s great content HERE!

Take this week’s poll HERE!

Watch Jim’s videos HERE!


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