The current recession can be considered a good learning experience not only to seasoned entrepreneurs but also to the younger Gen Y crowd starting out in the business world.
Donna Fenn, in her book Upstarts: How Gen Y Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit from Their Success, leverages 20 years of writing about Corporate America to present an encouraging view of what lies ahead with an increasingly more astute Gen Y entrepreneurs.
Harnessing the power of new technologies, partnering right from the start even with competitors and building a more socially and morally conscious company culture where a work-life balance is better achieved characterize the new breed, according to Donna.
In addition, performance-based meritocracy gets higher priority over employment years. The new entrepreneurs have grown up with the likes of Bill Gates, Steve Jobs and Richard Branson as their roles models. It’s interesting to note that out of the many companies that Donna interviewed in her book in 2008 when the economy was much healthier, only one went out of business and two sold the business when the book finally came out in the middle of the economic meltdown.
The last few months have seen a spate of small business getting gobbled up by larger companies at bargain basement prices. Just last month, BusinessWeek got sold to Bloomingdale for a mere $5 million. California’s oldest bookstore, Vroman’s both an independent local bookstore bought Book Soup.
In both instances, getting sold can spell the difference between death and survival for the acquired in today’s economic recession.
Market analysts are divided with some rejoicing that this is the best time for various small players in many industries to consolidate. But there are many who decry the bargain values of businesses that have thrived successfully for years and after all the investments their owners have put into the business only to get so little in the end.
Is this a sad trend or something fortuitous that herald better times ahead with fewer competing companies?
Anything that can help businesses to flourish in the current economic downturn is welcome. Small businesses need all the government encouragement and the Small Business Administration is accepting nominees for the national Small Business Week Awards that is held annually.
There’s a Small Business Person of the Year to be awarded in each state and one national winner. There’s a Young Entrepreneur of the Year as well as a Small Business Exporter of the Year award.
You can’t nominate yourself, of course. You’ll need a local organization to do that. Nomination application forms can be downloaded from this site:
http://www.nationalsmallbusinessweek.com/_files/live/2010AwardNomForm.pdf. Just make sure it gets to your local SBA office this Friday, Nov. 13, 2009.
Almost two years of recession have left small business closing shop. The ADP estimates that as many as 2.6 millions jobs have disappeared from small scale enterprises reeling form the economic meltdown. And those that are lucky to remain in business are stripped to the bone, as it were. They are getting by with the just slightly better than a skeleton workforce while some have reduced payslips.
Cost cutting measures have never been more severe. Branch offices are shut down or floor spaces reduced to save on rentals and electricity where workers can just do their job from their homes at reduced salaries. Full time employees become part-timers and many job functions are outsourced overseas with cheaper labor cost.
Corporate America will never be the same again. With skeleton workforces often taxed to their productivity limits right in their homes that are wired to the internet. With this, a lot of savings had been realized that just might be extended even after the recession.
The big honchos got their billions in bail out loan money from President Obama’s Troubled Asset Relief Program or TARP over the last 12 months. It looks like the President is now setting his sights to doing the same for small businesses in trouble. Hopefully, his proposal gets congressional nod soon enough.
The initiative would grant small community banks with assets below $1 billion to get loans with lower 3% interest rates than the prevailing 5%. It will also increase the SBA lending limit from $35,000 to $50,000.
The National SBA has been in batting for this government support on small scale enterprises and it’s good to hear that the bill gets re-introduced by the Senate Committee on Small Business and Entrepreneurship chaired by Mary Landrieu (D-LA). The only question is, will it still help or it’s too late?
Murphy’s law just can’t be beat. But if you are prepared, you can always mitigate its impact on your business. Get yourself a copy of The Worst-Case Scenario Business Survival Guide, a survival reference guide everyone and every business should have.
It’s not another heavy-handed economic or business management book that you need to digest from cover to cover. Authors Mark Joyner and David Borgenicht co-wrote the book to cover how to deal with worst-case scenarios in HR, sales and marketing and productivity areas, among others.
As a quick reference guide, you only use it when confronted with business problems, emergencies and crisis situations like labor strikes, executive disputes, or meeting the payroll. Even if your business is doing fine, it’s comforting to know you’re armed to deal with any of Murphy’s Law’s unpredictables.
That anecdote about a Rolls-Royce owner who got his 2-year old Rolls stuck in deep muddy snow unable to start its engine and the response he got from the RR company always figure in my mind as the best example of customer care that lets your customer know how valuable you are to them.
Rolls dispatched a mechanic right there via a rented helicopter within an hour of the customer calling for help. Now, can you do that for your customer? Of course, you’re not in the same business but how far will you go to help a customer with a failed product bought from you?
Every business should follow this example.
Unless you have a really shoddy product that fails miserably, going the extra mile will bankrupt you faster the setting sun. But if you are fully confident about the product you are selling, consider going the extra mile as an investment in customer relationship management.
Just a reminder, Christmas is just around the corner. Even a greeting card goes a long way as a marketing tool for your business. For frequent patrons, a decent food basket, desk organizer or even a lowly desk calendar won’t dent your finances at bit.
Client gifts never fail to add some mileage to your marketing effort as a reward to customers who have given you good business during the year. And customers appreciate this more than you think, putting you at the top of their consciousness the next time they think of getting product or service you carry.
So start making a list and buy those customer gifts if you have not done it already. You have about a month to do it. Bear in mind that the gift giving period should happen before Christmas Eve, or it would be too late.
Airlines have been at the forefront of rewarding loyal passengers with those frequently flier clubs that entitle big fare discounts based on the mileage they’ve traveled with them or their partner airlines. Yup. Those mileage points pile up if you travel with airlines that are part of their alliance.
Can small business with small profit margins take the same route? Why Not? Customer loyalty should always be rewarded. Frequent buyers or even first time buyers appreciate an email or two that remind them how wonderful it was to get their business with even token discounts or special products that are in the same league as their previous purchases.
Amazon does this form time to time. In fact, the site knows your last purchases and recommends new items the next time you visit their site. I think it pays a lot to get something like this offered in your business.
Companies can’t be standalone islands. Just like any human being, and because companies are social entities, they need to create and nurture relationships with both people and fellow companies in order to grow and prosper. Ed Wallace has come out with a book entitled Business Relationships That Last that dramatically emphasizes this.
With more than 25 years in corporate America, Ed Wallace chronicles his proven principles on building and maintaining lasting relationships. His books essays five steps that can transform simple contacts into business partners with real-life anecdotes and insights from his own experience. It’s a program any company large or small that looks at networking as a business opportunity to add to his corporate library.
