Rough Times Building Businesses

Building Businesses in Turbulent Times — HBS Working Knowledge:

"In fact, cost cutting and restructuring are simply the first steps in repositioning and leading your company and industry through the crisis and in defining how business will be conducted in the future. In this interview, Applegate explains how large and small companies can position themselves to survive—and thrive—in turbulent times."

For small businesses

Why Small Companies Will Win in This Economy - Peter Bregman - HarvardBusiness.org

In the worst economy we've seen in decades, Passlogix, a privately owned 100-person software development company, just received over a million dollars in prepaid commitments for the next three to five years of service. And they beat out several much larger more established companies, like CA (14,000 employees) and IBM (400,000 employees), to win those customers.

Now, how do you explain that? The bigger companies aren't getting similar deals. It's not standard in this industry to prepay contracts of that size and duration. And the clients received only a small reduction for their upfront payment, less than the cost of capital.

I think it's a trend. And understanding it might just be the difference between failing and thriving in this economy.

Yesterday morning I had breakfast with a good friend of mine, a mentor in the consulting industry. He's a senior partner in a large consulting company and has worked in one large company or another for the past 35 years. Really smart, really talented.

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Now compare that to Passlogix, whose clients know they can pick up the phone and speak with Marc Boroditsky, the CEO. He tells clients about his commitment to the company and to them, and they know exactly who to call if the work isn't done to their expectations. That personal relationship, that trust, is important to them. They're willing to invest in it long term — to the tune of millions of dollars, up front.

And it's not just the CEO. If clients speak with other employees in the company, they'll get the same feeling of trust. A small company gives its employees a sense of security and employees pass that feeling on to clients. Not that small companies don't go out of business. They do all the time. But each employee has much greater control over his own destiny. In a company of 30 employees, if you do a great job, there is a good chance you'll be recognized. But in a company of thousands? It's easy to be missed. And easy to be laid off.

The gap of confidence between small companies and big ones is growing. We used to rely on the security of big companies. That's why we worked for them. And hired them. And put our money in them.

12 Ways Companies are Reacting to the Recession | Shrinkage Is Good

Recessions mean big changes for everyone and everything, including the marketing campaigns businesses use to reach customers. During economic downturns, the “same old, same old” advertising that carry businesses through prosperous times simply will not cut it. Our current recession is no exception, as businesses take to the Internet, radio, television, and billboards with marketing tactics that target the needs and concerns of consumers under duress rather than the products themselves. Here are twelve examples of such recession marketing strategies, as well as the companies known to employ them.

Silver Lining - Google Venture Fund

I noticed Google Starts Venture Fund from The Washington Post but have seen little mention of it elsewhere:

"Google Ventures will invest $100 million in its first year and mostly target young companies, Bill Maris, a managing partner of the unit, said in an interview. The fund will invest in areas such as consumer-oriented Internet companies, health care, robotics and nanotechnology, he said.

The unit may help Google tap technologies that benefit the company's business, said Rich Miner, also a managing partner of the venture.

The announcement comes at a challenging time for venture capital firms. Fundraising in the industry in the United States fell 71 percent last quarter, according to the National Venture Capital Association."

Aspiring capitalists may want to pay attention to this.

Nascent 500: Business Plan Challenge

Just something that I thought might be of interest to any would-be entrepeneurs: Ball State University - Nascent 500: Business Plan Challenge:

"2009 Timeline
December 5, 2008—Registration forms are due
January 20, 2009—Business plans are due
February 16, 2009—12 semi-finalists are notified
February 27, 2009—Pole position papers and final business plans are due
March 27, 2009—Limosine and Homestretch rounds"

Business stuff: Finding Business Information

Okay, so you are here looking for political stuff only. Sorry. I figure helping Hoosiers to keep or start their own businesses is a political thing. After all, we cannot expect Mitch Daniels to help the small business, can we? We should not - cannot - let small business think their only friends are Republicans.

So take a look at Finding Competitive Information for Growing Companies:

Entrepreneurs may be defined as individuals who perceive an opportunity and create and grow an organisation to pursue it. According to the Global Entrepreneurship Monitor, roughly one in ten people worldwide is engaged in early-stage entrepreneurial activity, which is defined as setting up a new business or serving as owner/manager of a business up to 3.5 years old. Most of these organisations are small and medium-sized enterprises (SMEs), yet their impact on the economy is significant. In the United States, for example, firms with fewer than 20 employees represent 97.5 percent of the total number of firms, account for half of U.S. non-farm real gross domestic product, and have generated 60 to 80 percent of the net new jobs over the past decade "The Small Business Economy", U.S. Small Business Administration, 2006:

Ball State as Resource for Business Information

I think I have disclosed my Ball State alumnus status before now, but if not I have now. Which really does not matter that Bureau of Business Research is a good resource for Hoosiers with businesses or thinking of going into business.

Mid-sized Business is Good Business

So sayeth the Indiana Chamber of Commerce by way of the Indianapolis Business Journal:

Mid-sized companies are a lot like middle children in a family, a new Indiana Chamber of Commerce study has found. They tend to achieve a lot, but don't get the attention they deserve.

The businesses amount to only 3 percent of all businesses in the state, yet generate 30 percent of the jobs and more than 40 percent of the sales, the study found. Indiana has 3,789 companies fitting the mid-size description of $5 million to $100 million in annual sales.

Frankly, this ought not be a great surprise to many. The Indiana Democratic Party talked about it this past Saturday at the convention. Yet these same businesses may lack the ability to provide the benefits of our vanishing auto industry. Which makes another reason to support national health care.

A Blog For Small Businesses in Small Towns

Not me but Small Biz Survival. The blog even gives a guided tour. Which I think is brilliant and something I might add to my law blogs. Good practical advice. Check it out.

Shameless Family Plug

Finally, my dad gets a web page for his business. I think it is a pretty good one. You can look at it here.

Wanting to Start a Business?

Read about this in today's Muncie Star-Press: Workshops planned for businesses. Sounds like a good thing:

Small business owners developing new technologies will have a chance to learn about federal grant programs and successful applications for funding in upcoming workshops.

The workshops are the latest efforts by the Indiana Economic Development Corporation aimed at helping small businesses successfully navigate the Department of Defense's SBIR/STTR programs.

The organization has these workshops slated for small business owners:

Jan. 16 -- How to avoid common mistakes on an SBIR/STTR Proposal and Application.

Feb. 13 -- Identifying topics, contacting agencies and developing a successful work plan.

These workshops will begin at 8:15 a.m. at the Indiana University Emerging Technology Center, located at 351 W. 10th St. in Indianapolis, and will close by noon each day. Cost to attend each workshop is $10. Breakfast is included.

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The IEDC provides proposal-drafting assistance and a dollar for dollar match to companies successful in obtaining Small Business Innovation Research and Small Business Technology Transfer grants from federal agencies. In 2006, 60 Small Business Innovation Research and Small Business Technology Transfer grant program recipients received a total of $6 million in matching funds from the state's 21st Century Fund.

Business owners and entrepreneurs may register for the workshop or the entire series by calling 812-384-3283 or http://www.in.gov/iedc/sbir/index.html.

The same page lists computer classes offered by Ball State.

Indiana Business Network

For those of you in Centeral Indiana with a business or thining of starting a business, here is a business networking group that needs checking out: Indiana Business Network.

Business plan seminar Monday evening in Anderson

From today's The Herald Bulletin: - Business plan seminar to be held Monday at APL.

"For those intimidated by the need to write a business plan, the local SCORE chapter will present a quick, logical and simple preparation sequence for business planning. The presenter will be Bill Christman, a SCORE volunteer."

What about small businesses?

BizJournals has a report on small businesses with information on leaders in select small business categories, and the best markets for small businesses, and the worst markets for small businesses.

The good news is that nothing in Indiana appears on the worst markets and the bad news is that nothing in Indiana appears on the best markets list. For what it is worth, the Indianapolis metropolitan area appears on this list at 41.

Yes, we need Big Business to help pay the property tax but we also need to small businesses. I hear nothing of any work being done to promote small businesses.

Update and some odds and sods

Work intruded again. A lot happening and a lot on my mind but some of that will have to take a backseat to getting the rent money.

Here is a piece in the Toronto Star that caught my eye on proportional voting. This was considered a bit (not probably this exact formulation) for Indiana back in the 1800's. I think proportional voting does have some points in its favor. I think that it may lower the desire to gerrymander districts and I think it might have some effects on campaign spending that avoids arguments about free speech.

Here is an article from the Noblesville Ledger about the rise of small shops in their area. Well, worth thinking about why this happens in Hamilton County but not in Madison County.

Another critique of Obama's website here. It articulates better the points I made here.

Small businesses key to economic development

The Small Business Administration has these newsletters. Today I received one publicizing a new research study called Small Business and State Growth: An Econometric Investigation, written by Donald Bruce, John Deskins, Brian Hill, and Jonathan Rork. I had time to read the summary but I found this paragraph interesting:

The authors conclude that this general finding reveals that state efforts to promote small business formation will be more fruitful in terms of generating economic growth than virtually any other policy option in our models.

I do not think our local or state economic development plans place much emphasis on small business. Why not? True, reading the whole study may point out flaws in the study but common sense tells me that small businesses are necessary - even if only as a component in a larger mix of differently size businesses.

The summary is here and the full report is here. Both are in PDF format.