NOT AS BAD AS EXPECTED OR BETTER THAN EXPECTED

It was announced yesterday that the job numbers for October 2009 were, “NOT AS BAD AS EXPECTED”.  What that translates to is that ONLY 190,000 jobs were lost that month.  That the economy is mending slowly.  THAT IS BETTER THAN EXPECTED?  Only 6 months ago over 500,000 jobs were lost in a single month.  So see, things are getting better, or so they say…

This is the new spin on some very bad economic news.  Sooner or later we may have a statistic that only 1000 people lost their jobs in a single month, which would be great.  But what if those people were the last 1000 people working?

Over 16 million people are out of work, over 10% of the work force. Even though that means that 90% of the workforce is still working, here is another statistic, with a little spin, to look at: If all of those 16 million people, while employed, ONLY earned $100 per week than that means that 1.6 billion dollars has been removed from the working economy.  1.6 billion dollars per week, that’s over 75 billion dollars per year!

It has been replaced, for the most part, with unemployment benefits.  However, that is “NOT AS BAD AS EXPECTED”, imagine how big the number would be if all of those people were earning more than $100 per week.

Believe It or Not, the System is Broken

Who ever heard of a presidential campaign starting almost a year before the Primary elections, and then after one caucus the political analysts, which probably number in the thousands, plus the polls, have declared a winner and a loser! No need to go any further, we have a winner. Go away New York, California, Florida, Texas, and all of the other States in this country. In fact, forget the rest of the country and the millions of people who vote. Iowa is the only official state to go and place your vote because that is where the next President of United States is officially selected. I guess I mean the President of Iowa. Based on the information by the experts, a candidate for the Democratic party was already chosen.

But damn, this country had its first Primary Election a week later, in a different part of the country. Now the analysts are declaring, “STUNNING UPSETS”. What will we do now? We have more than one candidate that the people are interested in seeing as President, and they’re from the same Party.

We have become a nation of sensationalists. What was once the norm is no longer. The process and the outcome before the election is very likely to be determined by those who can put the best spin on the results of each Primary and what the future holds. How do they know the future? Only one week into the Primaries and they are already wrong.

This country faces some very serious issues that need to be addressed by everyone. The possibility of a recession is just around the corner, our standard of living in this country is disintegrating, healthcare for everyone is not real without it costing a fortune, deficit spending is out of control, global warming is a world crisis, plus a list of other problems that are facing all of us. If you have been around long enough, you know that our political system has some serious festering flaws. Unfortunately, right now only vague generalities are being spewed by all of the candidates and are being mistaken as real answers for today’s issues. We are being told that each one of them can solve the problems, if elected. Our system is totally broken!

The argument to this statement is that this is a great country where we have the freedom to vote for whomever we want. Then why are we being bombarded by “expert” analysts, and told about polls with small margins of error, that this candidate or that candidate has pretty much locked it up, all before the first primary was even open. Now the political news programs are yelling, “WHERE DID WE GO WRONG? HOW COULD THIS HAVE HAPPENED?” This happened because it is too early to determine the candidate based on one caucus and one primary. It is too easy to be misled.

As each week goes by it will get tougher and the field will get smaller. We’re suppose to learn more about those people who are still standing and hopefully what they really stand for and think. As time goes on each primary will grow in importance, we can only hope that we truly find a candidate who is a true leader. We want to believe that we made our decisions based on their response to the issues that affect our lives. What we don’t need is to be influenced by some eloquent speaking dimwit whose crystal ball, or private interest group, tells him to tell the public what they want the results to be. Fix the system!

 

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Small Business Pitfalls – Part 2

What is Marketing? It’s a strategy and effort which helps you match your customers to what you sell.You have a product (which is good), or a service (which you do well), but you don’t have any customers. You need to market yourself to the outside world. But what is your plan?

The goal of most marketing plans is to increase business. Once you set your goal and you implement your plan, allow an adequate time frame to see results. Increased business from marketing is usually not instantaneous, as with everything else in a small business it takes time to reap the benefits of a good marketing plan. From the beginning, it is important to avoid the pitfall of not setting marketing goals. Often, many small businesses don’t realize the importance of marketing until it is too late. When you start your business, allow 10-15% of your available capital to your marketing plan. As your company grows, if you keep that same percentage, so will your marketing dollars.

In the beginning, it will be difficult to actually determine which method works for telling potential or existing customers about your company’s actual message. For some small businesses, the best marketing tool is you, the owner. Go out and see each customer, this is probably the most effective means to promote your business. You meet the customer face to face, you ask questions, you get answers, and at the end of the day you will have a clearer picture as to what your customers need from you and what you can do to help them.

Another marketing tool is the telephone, which if when you make a call you don’t take up much of your customer’s time, can be just as effective as going to see them. Mailings and brochures are necessary parts of most businesses. However, unless they are redeemable coupons or special discounts when presented to your business they are purely informational and it is difficult to judge their true effectiveness.

Plan early with regards to your marketing strategy and your efforts. Are you doing the marketing alone or will you have help? Will you hire a marketing firm? Will you have a sales staff? Failure to plan will lead to sluggish results. If you are a small business with ideas and plans for growing, the truth is, YOU CAN’T DO IT ALONE! I have to repeat this, YOU CAN’T DO IT ALONE.

When creating your business plan, marketing is an essential part of the growth of your business. Even if you have a very small budget in the beginning, there are still things that you can do. In the planning stages of your business, interview potential customers and suppliers of goods that you might purchase for your business, present them with a multitude of questions and listen to their answers. (Perhaps, go to the local college, contact their business department, and see if you can present your business model and questions to a class of 3^rd or 4^th year students.) The bottom line is that you could end up saving hundreds of frustrating hours and more importantly thousands of precious dollars. You may even by surprised at the various creative and effective ways that a beginning marketing plan can be applied.

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Small Business Pitfalls – Part 1

One of the worst things that can happen to a small business or company is not having enough money. It may sound like a simple thing, but it can come from a variety of different areas, with different solutions. When you are starting out, it is always important to take into account some of the pitfalls that can hurt your business, or worse yet, put you out of business. Try to be properly prepared for anything! Some of the potential problems facing the cash flow in a small business are as follows:

• A SUDDEN, UNANTICIPATED SLOW-DOWN IN BUSINESS
• CHANGE IN BUSINESS TRENDS
• NOT PAYING ATTENTION TO THE COMPETITION
• NOT ENOUGH CUSTOMERS
• UNEXPECTED MAJOR EXPENSES
• SLOW CASH FLOW

A SUDDEN, UNANTICIPATED SLOW-DOWN IN BUSINESS
What do you do if there is a sudden industry-wide decline in business? An example of this type of business climate would be a homebuilder who is building medium-priced homes in areas hit by the sub-prime crisis. As an unanticipated slow-down, this can hit you hard, wiping out your cash reserves. If you prepare, you can try to avoid this surprise.

CHANGE IN BUSINESS TRENDS
It is important to follow your market and not hide from impending changes to your sector of business. A change in business trends might mean that the product or service that you provide is now obsolete, or may have been improved. Either way, it is important to be aware of changes. Then, it is ultimately up to you whether or not you decide to change with the trend.

NOT PAYING ATTENTION TO THE COMPETITION
Even though you don’t want to hang onto every move of your competition, it is good to have a strong awareness of what they are doing in relation to yourself. Sometimes, when you have been making a product or providing a service, suddenly (or that’s what you think) this product can be furnished at a lesser price. It may be just as good, or possibly it is even better than your product. Here is where the Global Economy enters. Awareness of your competition is what should push you “to build a better mousetrap”. If you ignore the competition, they will surpass you easily because you never took the time to understand your own product enough to make it better.

NOT ENOUGH CUSTOMERS
This part of your business needs to be corrected and updated frequently. Constantly, you must be aware of your strategy and marketing plan so that you can make sure it is working and on target. You may think that you know who your customers are and what they want, but have you actually taken time to ask them? Sometimes assuming that you know the answers can hold you back from growing, and even holding on to existing customers. A simple questionnaire to your current customer base can help solve problems, and other times there is a need for more direct actions. By understanding your customers and their requirements you can effectively expand to additional customers within the same group, or even identify another group of potential customers that you were previously unaware of before.

UNEXPECTED MAJOR EXPENSES
Sometimes an unexpected expense can take away your cash flow in a flash. Anything can cause this, a machine breaking down, your computer system fails, a sudden rise in raw material costs, etc, but a good plan can help you prepare for this pitfall. Even though we don’t want to save for a “rainy day”, it is important to have some cash for the unexpected. Good maintenance can go a long way in preventing unexpected expenses, but it can’t prevent everything. Be sure to have a plan so that when this happens, you will know what to do. Remember to remain calm, figure out a solution to the problem, and clear the way for the solution.

SLOW CASH FLOW
No one thinks that this can happen to them. Not enough business, customers are paying slower than usual, or more money is going out than coming in. This can creep up on you because any of these examples don’t follow a specified duration. It could be a few days, a couple of weeks, or even longer. Are you prepared?Improve your cash flow by discounting for cash. Give discounts to customers if they pay within 7 days, and or 10 days. (Example:5% 7 days, 2% 10 days.) If you have a potentially large order, give a discount to your customer if they pay the whole order up front. Encourage them to pay early.

I don’t expect this to answer all of your questions regarding cash flow problems and business slow-downs for a small business. It is just meant to give you some insight into problems if the proper preparations are not made and taken into consideration from the beginning.

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Growing Number of Consumers Unable to Pay Credit Card Debt

There are articles out today about the growing numbers of consumers who are falling behind on their credit card payments and debt. The numbers are alarming, people who are in this situation are finding no relief from the lenders, and things could get worse. There is no doubt that credit was easy to come by for most, and the amount of individual cc debt is at historical numbers. The unfortunate thing is that when they find themselves in this postion the lenders begin to treat them as the enemy. “High Risk”! This is something that the credit card companies helped to create and are equally responsible for the problem.  

What consumers can hope for when things go bad are very high interest rates and fees which makes it almost impossible to repay the principal. For most, the downward spiral begins. Millions of people are slipping into this deep well with no possible way of getting out.

Now is the time, before it is to late,  when both the credit card companies and the consumers should begin working. First, start with lower interest rates, allowing the consumer the chance to begin to lower the amount of principal debt owed. (Assuming that they can make the adjusted payments.) As it works and the responsible consumer begins the hard task of erasing their debt, they begin to learn how to work within their means and how to work with less credit.  They should not be penalized for having some rough times in their lives.  I know that it is more complicated than this simplified solution, but it has to start somewhere.  However, if the lenders of this country think that the only way they are going to collect their money is by harrassing people, charging them rates that are criminal, or chasing the consumer into a corner with no possible solutions, then this country is in for some extremely tough economic times that have not been seen in over 70 years.  

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