Category Archives: Business

My discussions on the world of business in general.

What Do You Care About? | The Difference between the NFL’s Labor Union and the Chicago Teacher Strike

Teachers' Excuse for Not Starting Merit Based Pay

The proverbial $#!& finally hit the fan with the late night ending to last week’s Monday Night Football game showcasing the Green Bay Packers and Seattle Seahawks. If you have not seen the play itself, view the video replay on YouTube. NFL fandom has reared its ugly head since the end of that game screaming for blood because of the horribly missed call by the replacement refs; that is, except for Seattle fans (they’ll do anything for a win). This ended up forcing the end of the labor disagreement between the NFL and the officials’ union; a deal was reached and the real refs go back to work immediately.

NFL Lockout Details (NY Times)

  • NFL wanted to dismantle the pensions for officials – officials will keep them
  • NFL wanted to cap salaries – average official salary will increase 15%
  • NFL has option to hire full-time officials (everyone is currently sub-contracted) in 2013

What’s interesting about this is that it was considered a “lock out” meaning that the NFL refused to allow the referees into the games until they (the refs) agreed to the terms the NFL wanted. Roger Goodell (NFL Commissioner) finally caved as a result of the public outcry over horrible officiating since the season began.

Public outcry over this entertainment industry has largely out shadowed another significant labor dispute in recent weeks – the Chicago Teacher’s Strike. This one means the teachers refused to come to work until their demands were met.

Chicago Teacher Strike Details (The Economist)

  • The Teachers Union (TU) want control over hiring and firing of teachers (not teachers and schools)
  • The TU does not like utilizing teacher evaluations – a modified, lower impact evaluation created
  • The teachers ended with an average 17% increase in pay
  • The school year was lengthened, keep teachers at work longer – win for city and education

You would hope that our country would deem educational issues more important than professional sports, but I don’t think anyone alive actually believes that’s true. This is where it hurts, though.

The average Chicago teacher’s salary was $71,236 (ABC News). Notice the financial discrepancies. Notice the pay verses teachers in other cities and states. Notice the teachers willing to harm education for children for a minor increase in pay and the incentive to NOT work harder to educate. Notice the officials were locked out over pensions and raises for a multi-billion dollar industry.

The thing that makes this article so ostentatious is the fact that we are comparing entertainment to education. By looking at the salary figures it is an insult. It is, however, worth noting who the plaintiffs were. Who cared enough to cause work stoppage. The NFL didn’t want to pay officials their pensions. The teachers didn’t want to be paid based on their quality of teaching. It seems to me there are a few priorities out of whack.

Americans, we need to pay more attention to the important things in life – of which a football game (as much as I love the sport) is not included. We also need to understand that only so much money to go around the people who work harder, grow smarter, and fight stronger are the ones who will succeed. Grouping together to fight against those standards goes against what’s best for everyone on the individual level. Why not accept incentive based pay? Because it requires them to put daily effort in what they do. I believe that is one of the biggest reasons our economic system is in such shambles.

Then again, the vast majority of professional sports officials are also board certified lawyers…

How about you? Did you even hear about the teacher’s strike?

Teachers' Excuse for Not Starting Merit Based Pay

From http://www.cnn.com/2012/09/14/opinion/navarrette-teachers-unions/index.html – Don’t you think a solid argument would be more than, “just because you don’t have to do it, I shouldn’t either”?

Websites and Houses | Why Generalists are Merely Adequate

As hard as it may be to believe, I, in certain ways, miss living in a house I own. This is only after a number of beers though; it comes slightly before I start missing Omaha, but only after I miss being an awkward adolescent. It’s at those times I look over and ask my wife if she thinks we should buy another house. It’s a good thing she holds her alcohol better than I.

All this reminiscing I’ve been doing during my reentrance into the web world has many people worried, most of all my dog Quimby (yes, we named him after the womanizing mayor of Springfield). Apparently I have him so worked up that now he’s afraid of water bottles. Ok, that may be a bit exaggerated (only a bit). The truth is, both worlds hold many similarities and I am therefore not completely crazy when I discuss the two of them over coffee (be really concerned if I start drinking coffee). It is actually quite easy to compare the world of home building to the world of web design. To help describe the similarities, I have asked an old friend back for an interview using the ever popular bold/unbold Q&A format.

Though it’s been a long time since Mr. Fix-it Guy has appeared in a column, he agreed to help as long as I don’t use any overly complicated words. Our original disagreement was over the use of the word juxtaposition…notice it was not used above. Or was it supralapsarianism?

Anyway, thank you, Mr. Fix-it Guy for coming back and sharing your brain smarts with us.     It’s not for you “buddy”, it’s only for your fine readers out there. Besides, it’s too hot to bicker now.

Agreed. Can you explain why it’s important to have multiple professionals work on a building project?     Actually, no. The whole notion that says it’s better for a team to work on a project don’t know what they’re sayin’. Just because one person can’t be an expert at both the creative world and mathematical world doesn’t mean they can’t design a house and also wire it electronically.

I’m not sure I understand what you mean. Please Explain?     No.

Ok, not for me. But for the readers?     I guess. Old wisdom has always said that it is better to use multiple experts on a project as opposed to a generalist. This is because one person cannot be an expert in everything. The skills that it takes to be creative are the exact opposite to the skills it takes to be programmatic. Someone who can wire electricity and handle all the minute details of a fuse box is probably not the best person to be giving interior decorating advice. That’s the old way of thinking. The new way, which I subscribe to says, “Sure, I can do that.” After all, who wants to share money? Isn’t it better to keep it all yourself?

Hmmm… That’s a good question, Mr. Fix-it Guy.     That’s why I became a generalist. Why be the best at something when you can be decent at everything? I don’t like to share money.

You make a good point. It sounds like your sales are going pretty well.     Well, not so much.

What? Any idea why not?     I have no idea.

That’s too bad. I was hoping you would help me describe the similarities of home building with website design and development. Basically, the same kind of idea – how the design part is more like creative artistry and programming is all math. And don’t even get me started on coding languages.     What? Now I’m lost in your silly cyber space. And I haven’t landed a job in years! Any idea why nobody has been building new houses lately?

Is Greed Good? | A Look at Business Vision and Profit

Originally posted at Pro/Vision Coaching.

As our friend Gordon Gekko once pointed out, “Greed is good.” It is the oil that keeps the economic machine running, the grease that lubricates our free market, and the sludge that is produced from our toxic waste sites. I contend to you, how good is greed?

http://www.youtube.com/watch?v=PF_iorX_MAw

Our free market economic system relies on one very simple premise: supply vs. demand. Without demand, there would be no reason for supply. Without supply, demand would rise so high that even reasonable adults would transform into raving lunatics running on pure bloodlust for the next Tickle-Me-Elmo. Welcome to the holidays.

“After Target decreed that Black Friday would start at midnight Thanksgiving night and that employees must report to work at 11 p.m., an Omaha worker, Anthony Hardwick, posted a petition at Change.org asking the company to move the official start of Christmas shopping back to 5 a.m. Friday. Response from workers and others has been stellar: 192,000 signatures by Monday.” CNN.com

Each year we have watched these stores open earlier and earlier, tempting shoppers with great deals at horrible hours. It’s simple (and good business): this time of year there is an inherent rise in demand for the holidays. Because of that rise in demand, supply becomes in danger. Small stores cannot keep supply on the shelves and the wholesale market caters to those who can continue to keep demand on the rise. Big-box stores such as Target and Walmart have the infrastructure to handle holiday demand, keeping a relatively decent supply of products on their shelves for the shoppers. Obviously they want to sell more than other stores, so they compete with each other; if Target opens at 4am, Best Buy will open at 3.

The people that stand to be hurt are the employees, all of whom have significant gripes against their big-box employer (see americanrightsatwork.org to see examples of offenses). Not only do people have to be there during open hours, but stocking, delivery, preparation and clean-up work are needed also. Can you imagine shopping in a Target ravished by holiday shoppers with no clean-up? Not fun. Truth be told, though, in this instance, the stores are only responding to the public. If no one shows up to go shopping at 2am, do you think Target would remain open at that hour? No.

Thus, the question remains. Who is to blame? Is it the big-box stores? Is it ourselves? Is it a flawed economic system? Is it Cap’n Crunch’s? Gordon Gekko was right. Greed IS good – at least to a point. Greed is the emotion that pushes us to be the best doctors, inventors, teachers, producers, etc… in a free market economy. This is based on the simple principle of competition. I want a better life and to reach it must do better than others. Good business coaching focuses on this – VISION. This can be a good thing, because in order to reach that, we need the help and cooperation of other people. Thus, the “if you profit, then I can profit” ideal was born. As communal greed grows, life grows. It builds cities, national parks and green energy.

This philosophy fails when restraint dies, giving us no control over our material desires. Greed without restraint pushes us to dangerous ends that destroy others and search for our good at the cost of others as opposed to the good of all. It is this mentality that leads to corruption and is the cause of many of the symptoms our economy currently faces. When we look to help ourselves with the point of doing it at someone else’s expense, we cross the line. That greed does not rebuild our economy.

Maybe the best lesson this holiday season is a classic proverb that can help us look at things from a different approach. “It is better to give than to receive.” If we all give, then we all will receive; if you profit, then I can profit. After all, I would want my children to receive the best education possible so they have the opportunity to reach their potential. If I keep cutting the wages of our teachers, then I am not promoting good greed that grows a community (and my children’s future), I am just being selfish.

Selfishness is not vision. Vision for a better life for yourself and others is a great thing and the ultimate description of profit.

The Death of Customer Service

Originally posted at Pro/Vision Coaching.

It had been a long day at the office. All day long, day after day, it was always the same routine; and it was starting to get harder to pick himself back up again. There was no real reason why it broke – sometimes that’s what things do; they break. Tom was just reaching a crisis point. The competition for his job was becoming a bear to deal with, and neither his age nor experience was counting as much as they used to. When his mp3 player busted, for Tom, that was the last straw.

Granted, Tom had only purchased the mp3 player a week ago, and there was no reason for the player to die; it just did. Relying on the success of his storied career, he planned to walk right back into the store and have this problem fixed. Unfortunately, that was not in the cards. At least he wasn’t alone.

Tom’s friends joined him at the mall, though I’m sure it was mainly because he promised to take them out to dinner afterwards. The fun did not last long, though, because as soon as they entered the store, they had to deal with Ray. Ray was the customer service manager at the technology store. His job was to make sure that every customer got served, but he also had to ensure no easy points got scored against the company. In other words, Ray—definitely no saint—had no intention of allowing a return.

“I’m sorry, Tom. Before I can let you return this, I need to ask you a few questions. Has your mp3 player been roughed up in any way? Have you ever dropped it in water? You do know that automatically voids the warranty. If we find in any way that you caused the breakage of this machine, you’ll have more luck making money off the old 49′er gold rush than you will getting a replacement device.”

His buddies did the best they could to protect him from the coming onslaught, but Tom scrambled out of their way and into danger head-on. Ray’s complete blockage of an innocent return was inexcusable. There was no reason for Ray to be colder than steel; it was as if he were trying to pack on the punishment for no reason. After forty-five minutes of convincing, Ray finally relented and gave up the discount; mainly because he finally succumbed to the pressure being laid on him by Tom’s buddies. Being gang-tackled by a bunch of large guys isn’t fun for anyone, especially Ray.

In the end, Tom won the day and returned his mp3 player. I would say he is enjoying his new iPod, but I’m not allowed to use real product names. There is a lesson to be learned in all of this (by the way, if you haven’t picked up on all the football references by now, there are multiple lessons to learn), and that lesson is the value of customer service. When did it become okay to lie to a customer while signing up for satellite television? Or to jet off after a contract signing before anyone could ask questions? It certainly seems as though the big companies today truly do not care about your business. It may only be $39.95 this month they receive, but the lifetime value of that $39.95 per month client can be in the hundreds of thousands after a few years if nurtured properly (by way of longer-term contract, referrals, etc…).

The problem is that nobody cares anymore. What reason did Ray have to actually care about Tom’s problem? What motivation do the “Ray’s” in the world have for actually caring for the client experience? Are they receiving extra rewards for their level of “niceness”? Are they being compensated off the long-term value of the clients with whom they work? No. This is why customer service is dead. It wasn’t eaten by a lion.

If a customer service employee comes to work after having a bad start to their day, there is nothing to keep them from passing that on to other people; no motivation to listen to another complaining customer, or to take seriously an issue that they’ve heard about by thirty other people in the last hour. That is, unless the owner of that business cares – and cares enough to ensure that no bad days are allowed in the office – at least by way of ensuring that each employee is directly rewarded for their client care record. Maybe then customer service can be revived. Though I’m not holding my breath, miracles do happen. A few weeks ago a cowboy named Roger fulfilled every American male’s dream by making one simple decision.

Buccaneer.

Gotta Love the Quick Fix | Business Problems and Easy Solutions

Originally posted at Pro/Vision Coaching.

I vaguely remember an old movie starring Michael J. Fox and James Woods entitled “The Hard Way”. I couldn’t tell you what it was about or even why I saw it, other than I assume it has something to do with doing something in a more difficult fashion. I certainly prefer doing things the easy way, and that is one of the main reasons why I love duct tape.

“Iowa Chrome”, as many call it is a tape that can hold virtually anything together. Originally designed for duct work, its main purpose was to hold the metal ducts together against heat and sometimes even water. For a roll of tape, that’s pretty impressive! The mid-nineties witnessed the rise of duct tape pop-culture, a fashion statement that included designer duct tape suits. I once made a wallet out of the beloved material, though I regrettably never used it. It is just so simple – one roll of tape that can fix basically anything – who wouldn’t want to use it for everything?

Most people did. It became such a popular household tool, that sales have consistently risen over the years, and, according to a recent article about a spike in sales due to Hurricane Irene, proves that Americans will pretty much use duct tape for anything. Why?

According to Florence and the Machine, duct tape is simply the quick and easy solution to life’s problems, and causes situations when not readily available. “I got in a lot of trouble from my stepfather for using his duct tape, to tape up my school skirt. So the inside of my skirt was done up with electrical tape. I always find in daily life, it’s like, don’t you kind of make your own uniforms in a sense. It’s really weird.” Duct tape is simply the quick and easy solution to your fix-it needs. This is why Iowans use it so much.

What does this tell us about life? It tells us that we are all about finding the quick and easy fix to our problems. It’s been often said that necessity is the mother of invention and, since the industrial revolution, America has prided itself on its ability to figure out faster, easier solutions to problems. While Eli Whitney was brilliant in figuring out ways to make plantation life easier, the impacting result today is unquenchable desire for the next get rich quick scheme.

Hard work is considered a bad word in many parts of our culture. Even during the recession struggles of the past few years, I personally have witnessed multiple people choose laziness. This shows itself in the business world as well. While I am in no way saying that multi-level marketing is, in and of itself, a scam, it is often marketed as an easy way to get rich quick. “Discover the Hefty New Online Revenue Source To Get Rich And Generate At Least $31,650 Every Month On Complete Autopilot! Now You Can Learn The Step-By-Step Methods This 21-Year Old College Dropout Used To Make Money Fast And Generate His First $1,000,000! The Secret Is Now Revealed To Public” (http://21butrich.com/ – please do not visit this site, used only for “journalistic integrity”).

The truth is getting rich quick doesn’t work. “In an October 15, 2010 [USA Today] article, it was stated that documents of a MLM called Fortune reveal that 30 percent of its representatives make no money and that 54 percent of the remaining 70 percent only make $93 a month”.

Success and financial independence can certainly be earned, but it takes time and hard work. Whether or not you have decided to go the multi-level marketing route, it still takes work – lots of it. There are plenty of people out there helping others reach their vision, business coaches (Yay for shameless plugs!) being a good place to start. However, regardless of how many people you have helping you, there is no way to avoid hard work. If you want to strike it rich, my suggestion is to roll up your sleeves, get your hands dirty, and invent something better than duct tape. Or at least make a bad movie with an aging movie star.

E-mail Responses and the Perceptions they Hold; Especially in Istanbul

Originally posted at Pro/Vision Coaching.

There are times in one’s life when decisions just have to be made. What decisions, you ask? Life. Altering. Decisions. These are the decisions that change the course of your life – the ones that once are made, will forever change your direction and ultimate success.

One-ply or two-ply? Margarine or butter? Boxers or briefs? Ok, these are all very important decisions that need to be made, especially the two-ply issue, though I couldn’t imagine why anyone would choose one-ply; that’s just crazy. What I am talking about is deeper than that, one that affects the very core of your existence and the perception of everyone you meet. Inside the world of business, it becomes crucial. What type of email responder are you?

This is a bigger issue than when Constantinople changed their name to Istanbul! Which, since we’re on the topic of Istanbul, is why you should never make a business decision based on a pretty girl; it’s just not thinking clearly.

http://www.youtube.com/watch?feature=player_embedded&v=IqJXxHi6RwQ

Anyway, the matter of your response (and response TIME) is hugely important in the business world. Who do you want to show yourself to be? Listed below are a few potential options for response times and the perceptions they hold:

1. Immediate | How needy do you want to look? If you’ve been invited out for coffee after a networking event and you jump in the car before they tell you where to meet, you might find yourself in for some disappointment. The issue of time is one to be respected, and if people know they can grab you whenever they want, they will never be around when you want.

2. Within 24 Hours | Short-term responses can be incredibly powerful. Once you have given enough time to process and understand the request, a timely response goes a long in way showing that you respect their time, which in turn should grant you the same favor. People in the business world will already assume you are busy, so getting back to them quickly will show you care about their time as well.

3. Within 24 Weeks | This strategy can be very helpful, especially when working in post-apocalyptic times. Since zombies have already established themselves as the ruling class, it is to be expected that one can go weeks without an internet connection. In fact, if it’s been a while since zombies took over, 24 months can be considered a very timely response.

4. Invisible Responses | Originally created and popularized by The Acme Corporation in the late 1920s, invisible emails were all the rage. You could write whatever you wanted and no would ever see it because they couldn’t see it! The problem was that the un-invisibility potion was not created for another seventy years, thus rendering the ability to communicate impossible. Simply put, if you don’t reply, you lose all ability to communicate.

How and when you respond to a person goes a LONG way in the ability you will have to influence, befriend, or sell to that person. Take the opportunity to consider their needs before replacing the statue you took from them with an obviously worthless replica. If you respect the time and effort they put into communicating to you by doing the same, they will notice.

Whether it’s Baseball or Business, it’s All About the Numbers

Take me out to the ballgame; take me out to the crowd.

Buy me some peanuts and cracker jacks; I don’t care if I ever get back.

What a beautiful stanza to a gorgeous song that represents all that is right with this world. Baseball. The greatest game ever played, especially if you are in business.

I can already see the bevy of comments that will hit me on this post about my obsession, and specifically why I chose to write an article like this at this time, so at least I’m prepared. Yes, I just attended an entire series at Safeco Field in Seattle, though for the sake of my current city popularity, I will decline to admit my favorite team. The first comment to guess correctly wins a prize that will be revealed at the end of this post.

While attending these baseball games, one cannot avoid being smacked in the face at a seemingly constant stream of statistics. “In June 2010, Felix Hernandez won the American League Pitcher of the Month Award for his flawless portrayal of Felix the Cat in the local theater’s rendition of Rent 3D: Alley Cat. This was his 5th AL PoM Award in 6 possible months.” Obviously that means he had a good year. You know he did well because NUMBERS DON’T LIE, at least not like your Uncle Herbert.

So what? Who cares that I can make up odd baseball and pop culture connections? Here’s why: it’s all about the numbers. If you need to know how many baseballs you need to sell in order to keep your store open, you must rely on the numbers. Take a look at this – did you know that the average operating budget for a Major League team was $84 million dollars in 2009? The Seattle Mariners’ budget was at $98 million. Their average ticket price was $30. So how many seats did they need to sell to cover their expenses? Knowing they play 82 home games, the equation becomes simple:

(# of tickets sold x $30) x 82 games = ticket income If ticket income had to match operating expenses, the equation would look like this: 98,000,000 / 82 = 1,195,122 (income needed per game) / 30 = 39,837 (seats that must be filled)

Safeco Field has a seating capacity of 47,878 for baseball games. That means Safeco would have to be at least 83% full each home game to make budget. In 2009 (according to ESPN), Seattle averaged 27,116 tickets sold per game. Going back to the original equation, that means Seattle pulled in $66,705,360 in ticket income in 2009. Put that into the next equation: income – expenses = profit. $66,705,360 – $98,000,000 = $-31,294,640

OUCH! It’s a good thing they have other ways of generating income. Do you? Do you know what your income needs are and where they are coming from? The moral of the story is this: numbers are cold, hard, and factual. They will tell you the real story of your business in a way that would make J.K. Rowling look like your Uncle Herbert. Use them, do not be afraid of them, hate them, but above all trust them. The best businesses know it’s all about the numbers.

And, by the way, the prize is a cup of coffee and a pleasant conversation.

Dangerous Distractions | Small Business Owners and Technology

Originally posted at Pro/Vision Coaching.

Since we are a firm of business coaches, I feel a burden of responsibility to warn you all of potential threats to your business. Our goal is to ensure the longevity and success of each small business owner with whom we work, and because of that, there is a vital news item that I must warn you about.

I have become convinced recently that the game Connect 4® is evil. You may think I have completely jumped off the cliffs of reality here, but do you know how many grams of carbohydrates are in each piece of that game? Ok, seriously, it is evil, and not just for the carb content. The effects of that game pull itself out of the fun and light-hearted past and into the scary present of the adult world in which we live and work. Take the story below about a guy named Rod Jones-Swatrzburg from West Spencer, Virginia, as published in the Secret Adult Gamer’s Monthly Circular.

“The online app version of Connect 4®, known to smartphone users as link4® has become quite a crazed sensation. With the ability to play games against live opponents any time of the day or night, countless people have succumbed to its temptations. At the center of our story is former business owner Rod Jones-Swartzburg. He started a fly-fishing business five years ago, specializing in fancy lures. His business was surviving, despite his self-admitted ability to market, and he was even getting close to being ready to hire his first employee. That is, until he downloaded the link4® app on his phone. Though the games only last a minute or so, he found himself losing hours at a time on his device. Hours turned into days; days turned into weeks; and unbreakable habits formed. Before long, no more lures were being made, supplies dwindled, and his store closed down. When interviewed next to the cardboard box he currently calls home, his only reply was, ‘May I borrow your phone for a minute?’”

This is obviously a tragic story of senseless over-obsession is a smart phone, but the temptation is real. The scariest part is that game is known as a “gateway game”. In other words, people that participate in the link4® world very easily find themselves deeper than they ever imagined, some even going all the way to the World of Warcraft® stage. According to a local gaming-health expert, “If a person walks through the online gaming door, it is rare that they are able to go back. There is a reason why the gaming community is growing exponentially (and gets used), while gym memberships grow exponentially, but never actually get used.”

Time is a precious thing, and it’s only worth spending in the right ways. It’s not renewable (such as money, carpet stains, and Charlie Sheen’s temper tantrums) and therefore must be treated with respect. Guard yourself, keep a constant watch on your profits, and never turn down a free apple pie. For these are where the rewards come.

That’s interesting, I just got a notification on my phone that someone wants to play a game…

http://www.youtube.com/watch?feature=player_embedded&v=Oyfvj5rkteE

Being Organized is for the Birds

Originally posted at Pro/Vision Coaching.

A crumpled piece of paper sits quietly on the floor, its jumbled words holding a message of deep significance, yet silenced by a single hasty act. My dastardly scheme is succeeding; as long as it can survive in its spot until 5 o’clock, the paper’s message will be forever destroyed at the hands of the night-time clean-up crew.

Who am I? I am disorganization, your single greatest enemy to profitability. It is my goal to keep your business down, your efforts up, and your profitability in complete disarray. I keep you from putting away your files, from cleaning up your workspace, and from systematizing your production. I work alongside my good friends distraction, hurried, and anxious. The longer you keep from paying attention to the growing pile of stuff sitting in front of you, the stronger I become, and the longer it will take to put me down.

I thrive in environments of low accountability, low visibility, and low commitment. And it doesn’t take much to get me started. All I need is for you to leave that one item un-dealt with, giving me just enough space to flex my muscles. Oh, and no one is immune. I can break into any safe or any system you put up to protect against me. Why? Because I already live inside you.

I have one weakness and one weakness only – constant vigilance. A plan that you are completely committed to that does not allow for one thing, item, or piece of information to be left out of place. You may think you are a “natural organizer” or admit to obsessive compulsive behavior – but both of those are fallacies – obsessive compulsivity may lead you to clean up a lot, but that has nothing to do with organization. Good organization is not needing to constantly clean up your desk, as it stays clean through continual acts of organization.

I’m not worried. Very rarely do I come across someone who has the will to defeat me, which is probably a good reason why many small businesses fail, they just don’t do what it takes to stay organized. And how can they? They are probably taking too long looking for stuff, too busy catching up on work they under quoted, or too frayed because they are trapped under a pile of junk.

You think you want to fly? I keep you from walking. Besides, I can’t imagine why anyone would want to fly anyway; leave that for the birds. They don’t have to be profitable.

Challenges Increasing for the Small Business Owner

Originally posted at Pro/Vision Coaching.

What exactly is small business? I’ve been pondering that question since joining Pro/Vision Coaching, as our target is clearly stated as a firm that coaches the “small business owner”.  One of the recurring themes in the answers I’ve found is that a small business is not necessarily able to fight for itself. Big business has its corporate lawyer divisions with lobbyists and special interest groups making sure that the interests of the company have every chance of succeeding. Even medium sized companies have that kind of ability—if not on the national level, then on the state and local levels—and every small business I find is without a doubt unable to force what’s best for them into being.

The SBA (Small Business Administration) has been one of the key players in the fight for the little guy. Their focus on helping small business and providing the small business owner the tools needed to survive in this marketplace has been has been the sling in this ever continuing David vs. Goliath struggle. Here is the truth: “small businesses have created 65 percent of all the new jobs in the past 17 years and employ half of America’s private-sector workforce” (AOL Small Business). As the backbone to the American economy, there is no doubt of the importance of organizations such as the SBA play in the lives of people all over this country.

Who exactly is the little guy? Defining the criteria for this sector is a vital process, as separating out who needs the help – and it is traditionally defined by amount of yearly revenue and number of employees. “The SBA sets its cutoffs based on either the number of employees or average annual receipts. Previously, $7 million in annual revenue was the cutoff for most industries” (Entrepreneur Daily Dose). What this cutoff does is protect the small businesses inside that range by providing resources and a voice, as the larger companies have the resources to accomplish it themselves.

What if the larger companies were privy to the resources and help that the small businesses were? Herein lies the danger for small business. If Goliath were prepared with his shield to protect from a projectile attack (and the respect for his challenger), the outcome could have turned out far worse for David. This is a danger that every small business must now prepare for, as “the SBA boosted that cutoff to more than $35 million for some business types. The result is that 18,000 more businesses now can seek help from SBA in obtaining federal contracts and loans” (Entrepreneur Daily Dose).

If a bigger business has the resources to take care of those needs, yet are able to save their own resources and use the SBA it causes to ripples of effect: 1) big business has even more resources with which to defeat their smaller competition, and 2) small businesses have much less. Imagine taking away David’s sling and giving it to Goliath – not a pretty picture.

It is not the purpose of this article to guesstimate as to why the SBA is making such drastic changes to the businesses they help – there are both positive and negative aspects to this decision. The challenge, however, is clear – small business just got thrown into a larger pond with bigger fish and less total resources to go around. Be prepared to get less help from Uncle Sam next year.