Small Business Weblog - Summer 2004 Archive

Do Big Box Retailers Create New Jobs?

Published: Aug 11, 2004

Local politicians are quick to usher their communities into the mainstream by having most of the big box retailers on their major traffic arteries. Yet, it's amazing how little opposition is raised when the advance team of a big box retailer does a number on the locals.

Soon the local leaders begin touting the new investment and the number of jobs to be added to the community when spending local dollars to accommodate the crafty negotiators.

Seldom do we hear of the number of local small businesses that disappear before and after the big box entered the marketplace. If the earned revenue of the community is not increased by a manufacturer or a service organization the consumer dollar remains constant. The big box entrant re-distributes those dollars into their coffers, spreads some well publicized pittances to local charities and the remainder goes into the pockets of distant shareholders.

Consumers forget almost all the profits of the former local businesses were circulated back into the local economy and the local businesses almost always hired local people at decent wages. Local retailers often deliver good value by sourcing through buyer groups.

What if consumers were able to get a wider variety of products at a lower price, do the local consumers come out ahead in the long run? Does anyone in local economic development offices ever calculate or reveal all the true costs to the community?

Sounds like a niche for an enterprising freelance economist who could collect a commission on the extra benefits, guarantees and savings extracted from the big box negotiators or even give strength to a not-in-my-backyard campaign.

Perhaps, big box retailers bring a huge benefit to some communities. How are we to know when our local leaders remain reactive?

Discussion & Feedback

Economic Development

Published: Jul 16, 2004

The Economic Development officer completed her report to the City Council. The main part of her report was an update on the negotiations with a mid-sized manufacturer that was planning to re-locate in the city. Discussion was declared open.

"Sounds like we're giving away the farm to gain a milking cow," exclaimed Councillor Albert. He turned to the City Treasurer and asked, "What is the total dollar value of all the concessions these people want from us?

"Including all the direct and indirect costs and values it amounts to just under two million dollars." was the reply.

"And when will we begin to see any tax revenue?" Albert sighed.

"In the fourth year."

"There's all the tax and other revenue from the 25 new employees, " chimed in Development Officer Hanson. "Besides, we could lose this prospect to another city."

"Yeah, I offered the company rep a ride to the airport," Councillor Baker interjected, "and from our conversations I concluded this company is negotiating with three other cities. I just wonder how much the other cities are offering as incentives."

"Well, my wife brought up an interesting point this morning during breakfast," said Mayor Bragge, "she had been chatting with Mrs. West about all the work and investment her husband is putting into their new expansion. My wife wanted to know how much assistance he was getting from the city."

"That's it!" declared Councillor Albert, "marketing to attract new businesses is like kindness - it goes a long way when it should stay at home."

Discussion continued until just before lunch. Topics ranged from offering expansion incentives to local businesses to even preparing industrial sites to be named Fields of Dreams by one councillor quoting, "if we build it they will come."

"If we believe the statistics proving small businesses are the major generator of business development and job opportunities," said the Mayor with one eye on the clock, "I move we approve a fund of $25,000 for a survey conducted by Economic Development to explore the expansion plans of our local businesses and to discover what incentives would stimulate action. Seconded? In favor? Against? Carried!"

Discussion & Feedback

A Small Business Buddy System with Iraq?

Published: Jul 7, 2004

Think of what you can exchange with a business entrepreneur in Iraq. For one thing, you can act as a goodwill ambassador for the small businesses of the western world. Most everyone who survives the rigors of running a business are, or soon become, men and women of upstanding character. You could be as good or better than some of the ambassadors currently spreading the message of democracy in Iraq.

Are the business operators in Iraq seeing that side of our morals, lifestyle and character? How about a buddy system where you could plug into a network to find someone in a similar business? Buddies can exchange business ideas because each culture seems to have its own way of solving problems. In the process, a circle of goodness develops to spread peace and goodwill across the gulf in our minds. You might call it the second gulf war.

The idea is not so far fetched when you consider the multitude of exchange programs that provide assistance to needy children, starving families and populations requiring expertise in providing for themselves.

There is no need for a formal sponsored authority that incurs administrative costs. Any small community of business persons can cooperatively supply the logistics. The idea can be national while the implementation is local. We have the infrastructure of the internet and the discussion forums on countless web sites. If it remains a volunteer movement it has a good chance of being self-sustaining and independent of government funding or interference.

Many entrepreneurs might find new supply opportunities. I suspect we would all gain a new healthy perspective on our own daily problems as if we were looking through the wrong end of a telescope.

Discussion & Feedback

Accentuate the ME in tiME

Published: Jun 28, 2004

Time management is more than cold-hearted efficiency. Most advice on improving your time management implies you should be harshly tweaking your usage of time so you can selfishly be more efficient with your own allotment of time.

Be selfish with your time usage while remaining a nice agreeable person. Time management is critical in and, extends beyond, the workplace.

Imagine being such a good manager of your time that beside getting important tasks done, you have a life full of variety, fun, self-fulfillment, loving, being loved and compassion as well as enjoying a stress-free existence.

Go ahead – follow the efficiency regimen! But, schedule time for those non-urgent important activities in your life where the rewards are greatest.

The greatest gift you can give each member of your family is the gift of your time. Idle time is when you gestate ideas, recreate your mental faculties and just build character. Allow yourself some fun time. Do you really want to be all work and no play?

Amid the praises for the late President Reagan, so adept at delegating and not sweating the details, there were stories told of how he would set aside time for handwriting personal messages, for gifting and spending time with family and friends.

Once, I saw a tax specialist strolling the street outside his building with hands in pocket and gazing into shop windows. This person would return to his office and answer his metered telephone that charged clients for his time at the rate of three hundred dollars a minute.

Have a life! Have a productive life! Have a happy productive life!

Discussion & Feedback

Be Proud to Be Out of Uniform

Published: Jun 15, 2004

Nowadays, the white shirt, the dull tie and the conservative dark suit have become symbols of bureaucrats and politicians. Although, when politicians want something, like your vote or your approval, they shed the tie and jacket. Bureaucrats will compromise with the navy blue blazer and slacks. The lower echelon types wear gray flannel and the aspiring climbers wear the taupe slacks. But, when they want to suck-up to the corporate elite they don the uniform.

For over a century businessmen have worn the obligatory shirt-tie-suit uniform. When they had a lot of babies that grew into rebelling teenagers the tie and sometimes the shirt was discarded by the young and those pretending to be youthful. This rebellious crowd even accused "The Organization Man" of having buttoned down collars matching with buttoned down minds.

Even the girls burned some restraining devices. Although, some of the early head-crashers at the glass ceiling emulated the white shirt-tie(?)-slacks. Eventually, their good fashion sense prevailed to displays of modest colors and designs.

Soon after, another rebellious crowd who slept with their new computer toys shunned the old shirt-tie-jacket uniform of business because they viewed themselves as creative artists.

Innovative entrepreneurs and the hands-on owner/managers of small businesses seem proud to be out of uniform. They are leery of those in uniform and consider them to be wolves in sheep's clothing. When they join gatherings where the room temperature is adjusted for the ladies wearing their colorful, shimmery, fashioned apparel they venture to wear something almost similar.

Be bold! Change that almost to challenge! Dare to change the similar to creative!

Discussion & Feedback

Many Small Businesses Ignored by Definition

Published: Jun 8, 2004

Governments, editors and others often define a small business as an enterprise with annual revenue under ten million dollars and with fewer than 1,000 employees. Where does that leave the businesses with revenues under two million and fewer than 50 employees? Out in the cold!

Text books and articles focus on the larger definition. Assumptions are made that there is ample staff for delegating many business functions. Worse, much information is large organization theory disguised as small business advice. Consequently, mom or pop soon tire of sifting through the irrelevant information

Government bureaucrats assume there's sufficient staff to process the red tape associated with the assistance programs.

In the first five to ten years of a venture the entrepreneur is a manager and a worker. The business was probably formed to exploit his or her skills in a particular area and that's the area where he or she works. But, the enterprise needs a manager who is focused, trustworthy and committed to developing the business revenues to the level where one of the skills can be delegated. In the meantime, the owner-manager-worker invests long hours with little time remaining for gathering business information.

Attend any meeting of very small business operators and the same people are discussing accounting, taxation, marketing and production.

Some people solve this problem with a partnership but, that requires just the right set of circumstances to be a successful solution.

The owner-manager-worker needs help dealing with large bureaucracies, how to conduct non-funded market research, do marketing on a shoestring and to maneuver through a competitive environment.

What is needed is a new word with a new definition.

Here are a few suggestions for a word: small-scale, minuscule, baby, little, mini, mom 'n pop, family, very small or micro. My preference is for mini because it is easier to spell, say and type. Also, it's less demeaning because it implies it is a scaled down version of a big thing.

If we, as individuals, spread our favorite word publishers will soon discover a new market with needs to fill.

Discussion & Feedback

Politicians Praise While They Grab Our Profits

Published: Jun 2, 2004

Give a politician a group of small business operators to address and you'll receive a flood of statistics extolling the value of small businesses to the community and to the economy in general. You can lump bureaucrats in with the politicians when it comes to this Behavioral Style [BS].

He or she will go on about the large proportion of jobs created, the creative contributions and the revenue contributions. Note how little is ever mentioned about the tax revenues generated.

My question is, "If we are of such value, how about getting out of our way?" Instead of issuing large sums of taxpayer dollars to support and train small business wannabe's, why not provide relief to the entrepreneur who demonstrates courage and determination to start his/her own small business?

Grants seldom produce more than 20% successes. Conditions set by bureaucrats seem to be set to cause a business to fail. Often, there are too many strings attached.

Should the small business people unite by joining associations? Not a bad idea but it should not be relied upon for any decisive action. Associations are often futile because of compromises and politically correct approaches.

Instead, I say let's attack the politicians and bureaucrats from our strength. We are courageous, influential and energetic individualists who make things happen. Most of us believe governments have been too soft with "welfare" handouts and support for the indigent.

As individuals we should urge politicians to get their hands out of our pockets.

Discussion & Feedback

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