May

13

The trend is in reverse-growth

May 13, 2008 | Leave a Comment | EMail This Post

There are any number of ways you can look at the particular historical moment you happen to occupy, depending as always on your perspective.

Living as I do in a small rural village that is heavily dependent on the two manufacturing plants here, I get to hear a lot of truly frightened people talk about globalization, outsourcing and job security. They’ve read the headlines and bought into the idea that large corporations, hungry for cheap overseas labor, are shipping jobs overseas and putting their livelihoods in danger.

But, as David Brooks pointed out in the New York Times a couple of weeks ago, that’s really not the way it is. Above and beyond the fact that, in general, manufacturing as a percentage of gross domestic output has been in decline for decades, there’s this:

Some Americans have seen their jobs shipped overseas, but global competition has accounted for a small share of job creation and destruction over the past few decades. Capital does indeed flow around the world. But as Pankaj Ghemawat of the Harvard Business School has observed, 90 percent of fixed investment around the world is domestic. Companies open plants overseas, but that’s mainly so their production facilities can be close to local markets.

Nor is the globalization paradigm even accurate when applied to manufacturing. Instead of fleeing to Asia, U.S. manufacturing output is up over recent decades. As Thomas Duesterberg of Manufacturers Alliance/MAPI, a research firm, has pointed out, the U.S.’s share of global manufacturing output has actually increased slightly since 1980.

So where are those jobs going that everybody is worried about?

It’s simple and you’ve read it here before.

I’ve said more than once that the technological advances of the last decade or two have increased productivity to the point that companies can reach scale at a much smaller firm size.

What that means for microbusinesses is that they can start micro and, if they choose, they can stay micro — without necessarily sacrificing their ability to increase revenues.

What that means for the manufacturing sector (as well as other industry sectors in the economy) is that manufacturing can be done with fewer people doing more highly skilled stuff.

It’s just like John Micklethwait and Adrian Wooldridge argued in their book, The Company: A Short History of a Revolutionary Idea, companies are getting smaller. That is, the trend is toward large organizations breaking into smaller units. Big companies, like microbusiness owners, are finding that they can do a bunch of stuff with fewer bodies … thanks to technology.

Of course, when people are frightened, it’s less … um … sexy to try to get them to use their brains and it’s often politically more expedient to let them feel victimized and help them to find an oppressor/enemy.

What’s interesting about that is that it is in the nature of the technology that is freeing so many people from traditional employment — in the manufacturing sector and elsewhere — that it is simultaneously empowering people to take control of their lives and finances back into their own hands.

From a political point of view, I’m wondering what would happen if, instead of stoking the flames of fear-enhanced resentment and going the rhetorical economic nationalism route, some politician somewhere worked to soothe those fears (especially among older workers) by coming up with a plan to help them transition into this new economy?

Less political fire and brimstone but, then, fire and brimstone is often precisely what keeps us as a nation from getting anything done.

Technorati Tags: , , , ,

May

12

Podcast: Fed Forestalls Congress with Credit Card Regs

May 12, 2008 | Leave a Comment | EMail This Post

I didn’t have time to get into the particulars of the Fed’s proposed credit card industry regulations in the podcast, so if you’re wondering what exactly they have in mind, they include:

  1. Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time
  2. Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges
  3. Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible
  4. Banks would be prohibited from imposing interest charges using the “two-cycle” method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle
  5. Banks would be required to provide consumers a reasonable amount of time to make payments

As Congressman Frank noted, a lot of what’s here is pretty much the same as what’s in the credit card industry reform bills floating around in Congress. But the legislation has more stuff in it and I have a hunch those Congressional Democrats may well want to push for the additional consumer protection measures.

Of course, they might just as easily wait until the next Administration for this one, if President Bush proves intractable.

Please to listen:

Subscribe to the Microbusiness News Briefs Podcast!

For more information:

Federal Reserve Proposes Rules to Prohibit Unfair Practices Regarding Credit Cards
NASE Letter to Senate Finance Committee (PDF)
NASE Issue Brief on the Tax Gap
Quarterly Indicators: The Economy and Small Business, SBA Office of Advocacy (PDF)

Technorati Tags: , , , , , ,

May

9

Deer-in-the-headlights marketing: give them a reason

May 9, 2008 | Leave a Comment | EMail This Post

Here’s a thing I read yesterday:

… when someone in the audience recommended he better define a technical term, he said, “If you don’t understand it, I don’t have time to explain it.”

He then went on to say it would simply take too much time to explain the term…so he believes the potential investors “either get it or they don’t. Sorry.”

The two-word term could actually be easily defined in civilian language. This would, however, require “Acme’s” founder to get down off his high horse.

It’s not the job of VCs, or bankers, or customers to work at understanding why they should open their checkbook.

Here’s the thing: there are other reasons besides the high horse that could cause a microbusiness owner not to explain why their potential customers should open their checkbook.

Sometimes, the why seems so obvious to us that we literally find it difficult to come up with language — especially persuasive language — to explain.

Let’s face it: there really are some things that you might reasonably have trouble explaining to somebody why they need to buy it. Stuff like diapers and deodorant and Preparation H.

If you use feminine hygiene products (to be properly euphemistic), you don’t really need me to explain why.

But that obviousness doesn’t mean that no explanations are necessary. If that were the case, there would have been no reason for you to have launched your business to begin with. And, sure enough, I have had conversations with microbusiness owners that went like this:

Them: But why do I need to explain to anybody why they need to use diapers? If they need them, they already know they need them.

Me: Yeah, but why do they need these diapers? Why do they need to buy them from you?

Them: Eh … um … ah … er … well, they don’t, really.

That’s perfectly true. Nobody has to buy anything at all from you. And if you can’t think of any reason why they should, then you should probably be in a different line of work.

But, of course, when you’re dealing with people, things are often not what they seem.

(Pause for musical interlude … )

One big reason why it’s possible for me to have that kind of conversation with somebody who calls himself a business owner is pretty much the same reason why a lot of microbusiness owners feel like they’re allergic to marketing in the first place. They really, really don’t like that icky feeling you get when you stand up somewhere and yell: BUY MY STUFF! BUY MY STUFF!

And who can blame them?

But of course, there’s a difference between standing in the middle of the virtual square and yelling like that, and knowing, within yourself, why people should buy your stuff. Modesty is all well and good but, in this situation, you really do need to be able to articulate why a customer should buy your product, from you.

It might seem obvious to me why a microbusiness owner might need business news and analysis that is especially tailored for them and, if I was my only target customer, that would be fine.

But there was no news outlet for microbusiness owners before the launch of The MicroEnterprise Journal and microbusiness owners managed to do okay without it. Which means that I need to be able to explain to those microbusiness owners why they really do need my newsletter if I want them to buy a subscription for it.

It means explaining to them what a microbusiness is and why it is important for them to self-identify as a part of that subset of the small business universe.

It means educating them as to how microbusinesses are different from larger small businesses and why that matters.

It means empowering them with the information that they are important to the overall U.S. economy, in spite of their small size, and why that is and how it works.

Explain, educate, empower. That is how you first serve your customers.

There really was a reason why you launched your business, right?

What you need to do is let people know that there is more to Preparation H and deodorant and diapers than hemorrhoids and B.O. and baby doo.

What’s nice for a deer-in-the-headlights marketer is that you can do all of that for potential customers without ever once screaming “BUY MY STUFF” in anybody’s face.

(And props to Mary for writing the stuff that got me started.)

Technorati Tags: ,

May

8

New-Era Business: What’s Out? What’s Emerging?

May 8, 2008 | 1 Comment | EMail This Post

Jamie Walters of Ivy SeaGuest post by Jamie Walters
Jamie Walters, besides being a longstanding friend and colleague, is the Founder and Vision Keeper of Ivy Sea, Inc., a business consulting firm. She is also the author of one of my favorite small business books, “Big Vision, Small Business” (Berrett-Koehler, 2002) and occupies a top spot on my personal list of “Favorite People Who Think.”

Most of us can sense, see, and hear a whole new ‘way of seeing, way of being’ being born, affecting how we view and ‘do’ every facet of our lives, including how we do business and how we approach ‘work’.

Do you remember when greed was definitely NOT good, and ‘urgent’ was seen as a life-threatening emergency, rather than default business jargon?

And how about when you were a ‘citizen’ rather than a ‘consumer’ — and ‘consumption’ was considered to be a disease rather than a cornerstone of culture?

There is no doubt about it, the old assumptions that we used to make about ‘business’ and ’success’ are being challenged, and are (or will be) changing considerably, and not a minute too soon.

For example, 20 years ago, the business icon was like Gordon Gekko, from the movie Wall Street, proclaiming that ‘greed is good’. Machiavellian antics weren’t just tolerated, they were viewed as ‘the norm’, and celebrated as being necessary for ’success’, no matter who got stepped on.

And as the Gordon Gekko’s of the business world were celebrated, and ‘downsizing’ was on the rise, anyone talking about ’social responsibility’ or ‘environmental consciousness’ or ’spirit-aligned work’ or ‘following your heart’ was marginalized, or even ridiculed.

During the passing era, small wasn’t beautiful, it was invisible. All that existed, for all we knew, were larger corporations, celebrity CEOs, ‘titans of industry’, and ‘corporate raiders’.

Times have changed. Markedly.

Now we hear terms like ‘conscious business’ and ’spiritual business’, or even, as I’ve written about, 360-vision ‘holographic business’. Spirit-centered and integrity focused ‘right livelihood’ is replacing the old ideas about ‘the rat race’ career track.

Greed for greed’s sake, urgency for urgency’s sake, and big for big’s sake are increasingly out of favor and out of style. ‘Social responsibility’ and ‘green business’ are even viewed as ‘yesterday’ — only the first tentative steps in re-imagining how we might meet the needs and unfold the greater potentials of the new era and new millennium.

More and more, those who are celebrated in this new era are the formerly ‘marginalized’ trail-blazers talking about whole and edgier new ways of viewing livelihood, business, and success.

If it doesn’t take into account its real, net effect on people, Nature, and planet — and ensure that that effect is respectful of Nature, people, and cultures — it’s ‘old era’ business.

Resource-chomping, culture-zapping, Nature-pillaging, ‘empire era’ mega-corporations run by Gorden (or Glenda) Gekko are out. If it threatens your health, marginalizes your family and community, and violates your heart and conscience, it’s not ’success’.

In 2008, we have ‘LOHAS’ (Lifestyles of Health and Sustainability) businesses, but the real, emerging stars of the show are the ‘human scale, living economy’ enterprises, and a ’slow business’ approach.

Now, a growing number of us know that more than 90-percent of all U.S. businesses have fewer than 5 people — known as microbusinesses — and a majority of those are actually one-person sole proprietorships. Yes, these ‘itty, bitty’ ultra-modest, often-simple enterprises are the drivers of economy and culture.

Small is ‘in’, simple-and-elegant is the trend, ’seven generations’ is the horizon for decision-making, heart is the center, and we are returning to our role as ‘conscious citizens’ rather than frenzied ‘consumers’.

The ‘Divine Feminine’ is replacing Gordon Gekko as the force to be emulated, embodied, awakened, and celebrated to restore balance and healthfulness, and ensure ’sustainability’.

Though the harbingers of change have been afoot for quite awhile, we’re at the edge of a wave that will grow before it peaks. Greater change, or perhaps the final changes to prevailing systems and norms, are before us. And while change can be challenging, it’s also rich with creative potential for systems that are more appropriate to our times.

There are many elements and facets to ‘the new-era’ way of being in business or approaching our work, and if you haven’t already starting to think about it and embody it in your own organization or livelihood, it’s time to take a fresh look and begin doing so. Pretty exciting!

Ivy Sea has experimented with, written about, and consulted on these ‘new-era’ ways of ‘mindful business’ and ‘conscious solo/SOHOpreneuring’ for more than fifteen years now, and the Ivy Sea Circle has a lot to share.

Visit Ivy Sea Online to explore and learn more.

Technorati Tags: , , , , ,