WSJ.com, WSJ Bogs - Real Time Economics
By Phil Izzo
March 28, 2011
The U.S. Economy is recovering from a severe recession, but some industries are unlikely to ever fully bounce back.
A new analysis by research firm IBISWorld looks at 10 industries that appear to be dying. The list isn't exactly shocking, but it represents a mix of sectors that are being left behind by technology or have been hurt by cheaper overseas competition.
The biggest industry profiled by IBISWorld is wired telecom carriers, largely being supplanted by cell phones and the internet. The dominance of the Web and digital media also puts Newspaper publishers, record stores and video-rental companies on the list. Meanwhile photofinishing also takes its place among the top 10 dying industries thanks to the growing influence of digital photography.
to read the full article, and see the rest of the top 10... click here.
Showing posts with label recession. Show all posts
Showing posts with label recession. Show all posts
Tuesday, March 29, 2011
Friday, October 22, 2010
Check out... 5 Ways to Make a Bad Economy Better
Published October 12, 2010
FoxNews.com
The economic forecasts just keep getting worse.
The National Association for Business Economics released a study Monday downgrading its growth prediction from 3.2 percent to 2.6 percent for this year, with next dragging along at the same pace. The forecast showed the jobless rate hovering above 9 percent through 2011.
The study comes after the Congressional Budget Office pegged growth next year at 2 percent, a pace the office described as "anemic" compared with other post-recession recoveries.
So what can the government do about it? Washington has been pushing out bold, new economic proposals since the recession started, but one glance at the job-fair crowds these days would prove these proposals have had limited effect.
There is no shortage of comments in the suggestion box. FoxNews.com has compiled recommendations from top economists about what Washington can do to give the country's job market and productivity a kick in the pants...
To read the full article... click here.
FoxNews.com
The economic forecasts just keep getting worse.
The National Association for Business Economics released a study Monday downgrading its growth prediction from 3.2 percent to 2.6 percent for this year, with next dragging along at the same pace. The forecast showed the jobless rate hovering above 9 percent through 2011.
The study comes after the Congressional Budget Office pegged growth next year at 2 percent, a pace the office described as "anemic" compared with other post-recession recoveries.
So what can the government do about it? Washington has been pushing out bold, new economic proposals since the recession started, but one glance at the job-fair crowds these days would prove these proposals have had limited effect.
There is no shortage of comments in the suggestion box. FoxNews.com has compiled recommendations from top economists about what Washington can do to give the country's job market and productivity a kick in the pants...
To read the full article... click here.
Tuesday, January 12, 2010
An Era of "Temp"
The Disposable Worker
Pay is falling, benefits are vanishing, and no one's job is secure. How companies are making the era of the temp more than temporary
By Peter Coy, Michelle Conlin and Moira Herbst
On a recent Tuesday morning, single mom Tammy DePew Smith woke up in her tidy Florida townhouse in time to shuttle her oldest daughter, a high school freshman, to the 6:11 a.m. bus. At 6:40 she was at the desk in her bedroom, starting her first shift of the day with LiveOps, a Santa Clara (Calif.) provider of call-center workers for everyone from Eastman Kodak (EK) and Pizza Hut (YUM) to infomercial behemoth Tristar Products. She's paid by the minute—25 cents—but only for the time she's actually on the phone with customers.
By 7:40, Smith had grossed $15. But there wasn't much time to reflect on her early morning productivity; the next child had to be roused from bed, fed, and put onto the school bus. Somehow she managed to squeeze three more shifts into her day, pausing only to homeschool her 7-year-old son, make dinner, and do the bedtime routine. "I tell my kids, unless somebody is bleeding or dying, don't mess with me."
As an independent agent, Smith has no health insurance, no retirement benefits, no sick days, no vacation, no severance, and no access to unemployment insurance. But in recession-ravaged Ormond Beach, she's considered lucky. She has had more or less steady work since she signed on with LiveOps in October 2006. "LiveOps was a lifesaver for me," she says.
You know American workers are in bad shape when a low-paying, no-benefits job is considered a sweet deal. Their situation isn't likely to improve soon; some economists predict it will be years, not months, before employees regain any semblance of bargaining power. That's because this recession's unusual ferocity has accelerated trends—including offshoring, automation, the decline of labor unions' influence, new management techniques, and regulatory changes—that already had been eroding workers' economic standing.
...
...To view the rest of the article click HERE (or on the title)
Pay is falling, benefits are vanishing, and no one's job is secure. How companies are making the era of the temp more than temporary
By Peter Coy, Michelle Conlin and Moira Herbst
On a recent Tuesday morning, single mom Tammy DePew Smith woke up in her tidy Florida townhouse in time to shuttle her oldest daughter, a high school freshman, to the 6:11 a.m. bus. At 6:40 she was at the desk in her bedroom, starting her first shift of the day with LiveOps, a Santa Clara (Calif.) provider of call-center workers for everyone from Eastman Kodak (EK) and Pizza Hut (YUM) to infomercial behemoth Tristar Products. She's paid by the minute—25 cents—but only for the time she's actually on the phone with customers.
By 7:40, Smith had grossed $15. But there wasn't much time to reflect on her early morning productivity; the next child had to be roused from bed, fed, and put onto the school bus. Somehow she managed to squeeze three more shifts into her day, pausing only to homeschool her 7-year-old son, make dinner, and do the bedtime routine. "I tell my kids, unless somebody is bleeding or dying, don't mess with me."
As an independent agent, Smith has no health insurance, no retirement benefits, no sick days, no vacation, no severance, and no access to unemployment insurance. But in recession-ravaged Ormond Beach, she's considered lucky. She has had more or less steady work since she signed on with LiveOps in October 2006. "LiveOps was a lifesaver for me," she says.
You know American workers are in bad shape when a low-paying, no-benefits job is considered a sweet deal. Their situation isn't likely to improve soon; some economists predict it will be years, not months, before employees regain any semblance of bargaining power. That's because this recession's unusual ferocity has accelerated trends—including offshoring, automation, the decline of labor unions' influence, new management techniques, and regulatory changes—that already had been eroding workers' economic standing.
...
...To view the rest of the article click HERE (or on the title)
Friday, December 4, 2009
Money Saving Secrets
Entrepreneurs' Best Money-Saving Secrets
By CHARLOTTE JENSEN, AOL SMALL BUSINESS
Even before belt-tightening became de rigueur, entrepreneurs were building businesses while quietly finding ways to cut costs. So who better to ask in a recession for their smartest, savviest cost-cutting tips? Here are 17 creative, easy and unexpected ways entrepreneurs are slashing hundreds -- and sometimes even thousands -- of dollars from their budgets.
1. When business travel is a must, optimize it. "Drive where possible, use travel as an opportunity to pack in as many meetings as possible, buy your hotels on Priceline, use last-minute flight discounts or take connectors to lower airfare."
-- Aynsley Deluce, partner, Parkingspots.com
2. Examine your balance sheet carefully. "By carefully looking beyond the totals to the details, we cut out $30,000 of expenses without any pain. We cut $10,000 in unnecessary bank fees, $1,800 in paper cups and plates, and $350 in credit card annual fees."
-- Julie Sue Auslander, president, cSubs
3. Think ahead. "We conduct a weekly shipping supplies inventory checklist to track usage. That lets us place larger shipping supply orders about every six to eight weeks, and we save about $1,000/year in freight costs compared to when we placed orders every two to four weeks."
-- Eric Mindel, director, PeppyParents.com Inc.
4. Question everything. "Never, ever be afraid to get four to five different opinions, estimates, thoughts, etc. In my business, I learned a long time ago no price is the final price, so when searching for products or suppliers, I have always asked, 'Can you do better on the price?' I've saved thousands of dollars across the board just by asking."
-- Christian Beebe, owner/founder, Worldwide Graphics & Sign Co.
5. Put an end to unnecessary upgrades. "Technolust can be very expensive--speaking from experience. As long as our existing technology equipment is adequate, we make do. This is a recent change for Geektime and has saved us over $20,000 annually for the last two years."
-- Alexander E. Fowler, president and senior consultant, Geektime Design Studios
6. Give e-learning a try. "For a couple hundred bucks, or sometimes no money at all, we can get schooled on new techniques without leaving our desks for professional development. We saved thousands last year."
-- Colleen Troy, owner, Touchpoint Communications
7. Team up for big savings. "We have substantially cut down on our overhead costs by office sharing with a structural engineering firm that has, like everyone else, had to cut down on staff. It is a win-win for both of us. We get the benefits of a large, fully functioning office, and they get income. We are also co-marketing on several projects since our firms' work is synergistic."
-- Virginia McAllister, principal, Iron Horse Architects
8. Get your green on. "Reduce paper consumption -- it is both green and economical. By changing what we print, we were able to reduce our consumption of paper by 90 percent. That translated to several hundreds dollars a year."
-- Orit Pennington, owner/CFO, TPGTEX Label Solutions Inc.
9. Give new life to items you would otherwise discard. "We save money by using pre-used boxes, newspapers and other scraps for all our packaging."
-- Adrien Edwards, co-founder, TheNakedHippie
10. Hire a college intern. "They will work for experience, are excited to be a part of a startup and will provide insight into their demographic. Give them the opportunity to own their work and see how quickly your company will grow as a result and for nothing more than time, appreciation and a killer recommendation."
-- Colleen Leader, owner, Loose Thread Stitchers
11. Shop around to secure the best deals. "I have begun to use different sites for any travel we do. For example, in the past I might call Avis directly to rent a car. Nowadays I go on RentACarNow.com, which is a marketplace of all vendors, and compare rates. This way I find the cheapest rate for my travel. I also use Hotels.com for hotel booking. It's incredible how much I have saved -- over 40 percent on my travel budget for the year. No longer can we rely on one vendor."
-- Robert Tuchman, founder, TSE Sports & Entertainment
12. Try an alternative compensation structure. "Hire commission-only sales reps and consider giving a sizable commission -- [it's] still cheaper than paying a salary."
-- Bradi Nathan, co-founder, MyWorkButterfly.com
13. Volunteer. "In addition to helping a great cause and gaining a personal sense of fulfillment, you often have the opportunity to meet/network with people who may have an important impact on your business -- including successful business leaders, angel investors, political leaders and members of the media -- that you would likely not have had access to in any other venue, regardless of how much you spend on marketing and PR."
-- Sarah M. Place, CEO, Place Trade Financial
14. Find cheaper ways to network. "A luncheon can easily cost $30 to $45, but you might get away with $5 to $10 to attend a happy hour. You can meet just as many people, if not more, when attending a cheaper event."
-- Ansley Meredith, owner, ENERGIZED Media Relations
15. Create buzz (for free) with social media. "We have developed a loyal following on Twitter and Facebook and have seen traffic to our website continue to grow. We've learned that directly connecting with people in their preferred mode of social communication not only enhances our valuable customer relationships, it doesn't cost a penny."
-- Jeff Avallon, co-founder, IdeaPaint
16. When possible, work virtually. "Maintaining a home office eliminates the costs associated with having office space."
-- Adil Lalani, founder and CTO, TwitVid
17. Keep employees happy (read: prevent turnover). "The costs [associated with] being a person short, running ads, time spent interviewing and the downtime while someone gets trained are huge. And then there are the indirect costs -- a dip in client confidence, burned-out staff because they're picking up the extra load and potential loss of clients. It all adds up to a huge number--a number most small businesses cannot afford to pay." -- Drew McLellan, president, McLellan Marketing Group
By CHARLOTTE JENSEN, AOL SMALL BUSINESS
Even before belt-tightening became de rigueur, entrepreneurs were building businesses while quietly finding ways to cut costs. So who better to ask in a recession for their smartest, savviest cost-cutting tips? Here are 17 creative, easy and unexpected ways entrepreneurs are slashing hundreds -- and sometimes even thousands -- of dollars from their budgets.
1. When business travel is a must, optimize it. "Drive where possible, use travel as an opportunity to pack in as many meetings as possible, buy your hotels on Priceline, use last-minute flight discounts or take connectors to lower airfare."
-- Aynsley Deluce, partner, Parkingspots.com
2. Examine your balance sheet carefully. "By carefully looking beyond the totals to the details, we cut out $30,000 of expenses without any pain. We cut $10,000 in unnecessary bank fees, $1,800 in paper cups and plates, and $350 in credit card annual fees."
-- Julie Sue Auslander, president, cSubs
3. Think ahead. "We conduct a weekly shipping supplies inventory checklist to track usage. That lets us place larger shipping supply orders about every six to eight weeks, and we save about $1,000/year in freight costs compared to when we placed orders every two to four weeks."
-- Eric Mindel, director, PeppyParents.com Inc.
4. Question everything. "Never, ever be afraid to get four to five different opinions, estimates, thoughts, etc. In my business, I learned a long time ago no price is the final price, so when searching for products or suppliers, I have always asked, 'Can you do better on the price?' I've saved thousands of dollars across the board just by asking."
-- Christian Beebe, owner/founder, Worldwide Graphics & Sign Co.
5. Put an end to unnecessary upgrades. "Technolust can be very expensive--speaking from experience. As long as our existing technology equipment is adequate, we make do. This is a recent change for Geektime and has saved us over $20,000 annually for the last two years."
-- Alexander E. Fowler, president and senior consultant, Geektime Design Studios
6. Give e-learning a try. "For a couple hundred bucks, or sometimes no money at all, we can get schooled on new techniques without leaving our desks for professional development. We saved thousands last year."
-- Colleen Troy, owner, Touchpoint Communications
7. Team up for big savings. "We have substantially cut down on our overhead costs by office sharing with a structural engineering firm that has, like everyone else, had to cut down on staff. It is a win-win for both of us. We get the benefits of a large, fully functioning office, and they get income. We are also co-marketing on several projects since our firms' work is synergistic."
-- Virginia McAllister, principal, Iron Horse Architects
8. Get your green on. "Reduce paper consumption -- it is both green and economical. By changing what we print, we were able to reduce our consumption of paper by 90 percent. That translated to several hundreds dollars a year."
-- Orit Pennington, owner/CFO, TPGTEX Label Solutions Inc.
9. Give new life to items you would otherwise discard. "We save money by using pre-used boxes, newspapers and other scraps for all our packaging."
-- Adrien Edwards, co-founder, TheNakedHippie
10. Hire a college intern. "They will work for experience, are excited to be a part of a startup and will provide insight into their demographic. Give them the opportunity to own their work and see how quickly your company will grow as a result and for nothing more than time, appreciation and a killer recommendation."
-- Colleen Leader, owner, Loose Thread Stitchers
11. Shop around to secure the best deals. "I have begun to use different sites for any travel we do. For example, in the past I might call Avis directly to rent a car. Nowadays I go on RentACarNow.com, which is a marketplace of all vendors, and compare rates. This way I find the cheapest rate for my travel. I also use Hotels.com for hotel booking. It's incredible how much I have saved -- over 40 percent on my travel budget for the year. No longer can we rely on one vendor."
-- Robert Tuchman, founder, TSE Sports & Entertainment
12. Try an alternative compensation structure. "Hire commission-only sales reps and consider giving a sizable commission -- [it's] still cheaper than paying a salary."
-- Bradi Nathan, co-founder, MyWorkButterfly.com
13. Volunteer. "In addition to helping a great cause and gaining a personal sense of fulfillment, you often have the opportunity to meet/network with people who may have an important impact on your business -- including successful business leaders, angel investors, political leaders and members of the media -- that you would likely not have had access to in any other venue, regardless of how much you spend on marketing and PR."
-- Sarah M. Place, CEO, Place Trade Financial
14. Find cheaper ways to network. "A luncheon can easily cost $30 to $45, but you might get away with $5 to $10 to attend a happy hour. You can meet just as many people, if not more, when attending a cheaper event."
-- Ansley Meredith, owner, ENERGIZED Media Relations
15. Create buzz (for free) with social media. "We have developed a loyal following on Twitter and Facebook and have seen traffic to our website continue to grow. We've learned that directly connecting with people in their preferred mode of social communication not only enhances our valuable customer relationships, it doesn't cost a penny."
-- Jeff Avallon, co-founder, IdeaPaint
16. When possible, work virtually. "Maintaining a home office eliminates the costs associated with having office space."
-- Adil Lalani, founder and CTO, TwitVid
17. Keep employees happy (read: prevent turnover). "The costs [associated with] being a person short, running ads, time spent interviewing and the downtime while someone gets trained are huge. And then there are the indirect costs -- a dip in client confidence, burned-out staff because they're picking up the extra load and potential loss of clients. It all adds up to a huge number--a number most small businesses cannot afford to pay." -- Drew McLellan, president, McLellan Marketing Group
Monday, October 5, 2009
Article: Recession Relapse??
Forbes.com
Digital Rules
Recession Relapse?
10.19.09, 12:00 AM ET
If our apparent third-quarter economic recovery proves weak and relapses into a second recession, the causes will be:
--Small businesses, constrained by lack of expansion capital and fearful of possible regulatory changes in health care, energy and union membership, sit on their hands and don't hire.
--Unemployment creeps above 10% and stubbornly stays there.
--Because small businesses can't or won't expand, commercial real estate values sink more than expected.
--Regional banks with lots of commercial real estate paper on their balance sheets fail by the hundreds.
In other words, a second leg of recession will occur if America's small-business sector doesn't expand. It's about the small-business economy, stupid.
Recoveries from recession in the U.S. are typically led by small businesses. We now have reached the inflection point--i.e., the recession is ending, but the recovery is embryonic--when small businesses historically jump to the lead and pull the American economy along. It is precisely at this time that small businesses ought to be emerging from their bunkers to lease or buy cheap commercial property as they start gearing up for growth. Six months from now unemployment should be back down to 8%--and headed toward 5%--and Americans should be toasting small businesses for creating four out of five new jobs.
Small-Business Recovery Is Lagging
But small businesses aren't hiring yet. We should be asking why not. Somebody high up in the Obama Administration must make the health of small business a top priority; otherwise the recovery will die, and unemployment will persist at 10%. If that happens the President can say good-bye to his large majorities in Congress 13 months from now.
Last month I gave a speech at an industry conference for restaurant owners and fast-food franchisees--typical American small-business owners. Recovery skeptics filled the room, even though some of the franchises represented, such as McDonald's, had weathered the recession fine and others, such as Panera Bread and Green Mountain Coffee, were growing impressively.
Their chief worries are those I described in the first paragraph. One is the difficulty of obtaining working capital. Restaurants need and use credit lines just to operate. Another is the set of cost concerns around President Obama's big plans for health care, energy and union labor. Another is the uncertainty of inflation and commodity prices that determine the cost of food production. Together, these worries are enough to dampen the spirits of small-business owners in the food-delivery industry. True, food delivery is just one industry, but it's a big one.
When the Blue State Obama Administration thinks of small business, it undoubtedly dreams of promising startups churning out solar panels for office buildings or turbine blades for windmills. If its dreams are serious, the Administration should get behind a crackling good idea proposed by entrepreneur Paul Graham. It's called the Founder Visa, and the idea is to make it easy for the world's entrepreneurs to come to the U.S. As Paul Kedrosky describes it on the Web site Growthology: "The particulars are still getting worked through, but it has to do with getting a modicum of [private] funding ($250,000) and approval from an independent board that this represents a real startup deal, not some back-room finagling for a visa, and that's it: You're in the country and you're off and running."
This is a heck of a good long-term idea, and let's hope the Obama Administration embraces it. But for the short and medium term, high-tech startups alone will never return America to 5% unemployment and defuse the commercial-property bomb. Most existing small businesses don't need assistance from the government. What they need is across-the-board relief on taxes. They need benign legislation (or no change) on health care, energy and unions. A wish list, in other words, that runs counter to everything the Obama Administration is currently trying to pass.
Small businesses have always infuriated some liberals. Sinclair Lewis was awarded the Nobel Prize in Literature for Babbitt--the story of a small-minded Realtor in the 1920s. The word "Babbittry" soon became synonymous with "philistine." Liberal writer Michael Lind argues on Salon.com for sacrificing small business at the altar of corporatism in order to pass Obamacare:
"The solution may be corporatism or corporate paternalism--by which I mean the mandatory universalization of private-employer benefits. If the politics of ethnic diversity makes movement in a universalist, social democratic direction impossible in the U.S., then the alternative might be to mandate that all employers provide certain benefits to all employees, with no exceptions. The costs of such unfunded mandates might drive some small businesses out of existence. But small-business owners are the most vocal opponents of wage and benefit reform in the U.S. The replacement of Scrooge & Marley by a smaller number of bigger private and public employers who treat Bob Cratchit and Tiny Tim better would not necessarily be a tragedy."
There you have it: small business as Scrooge! If Obama defender Lind represents the thinking of President Obama and congressional Democrats, then our small businesses are in for a long siege. Hunkered down, they will not expand, hire or defuse the commercial-property bomb. That's a formula for a second recession.
Digital Rules
Recession Relapse?
10.19.09, 12:00 AM ET
If our apparent third-quarter economic recovery proves weak and relapses into a second recession, the causes will be:
--Small businesses, constrained by lack of expansion capital and fearful of possible regulatory changes in health care, energy and union membership, sit on their hands and don't hire.
--Unemployment creeps above 10% and stubbornly stays there.
--Because small businesses can't or won't expand, commercial real estate values sink more than expected.
--Regional banks with lots of commercial real estate paper on their balance sheets fail by the hundreds.
In other words, a second leg of recession will occur if America's small-business sector doesn't expand. It's about the small-business economy, stupid.
Recoveries from recession in the U.S. are typically led by small businesses. We now have reached the inflection point--i.e., the recession is ending, but the recovery is embryonic--when small businesses historically jump to the lead and pull the American economy along. It is precisely at this time that small businesses ought to be emerging from their bunkers to lease or buy cheap commercial property as they start gearing up for growth. Six months from now unemployment should be back down to 8%--and headed toward 5%--and Americans should be toasting small businesses for creating four out of five new jobs.
Small-Business Recovery Is Lagging
But small businesses aren't hiring yet. We should be asking why not. Somebody high up in the Obama Administration must make the health of small business a top priority; otherwise the recovery will die, and unemployment will persist at 10%. If that happens the President can say good-bye to his large majorities in Congress 13 months from now.
Last month I gave a speech at an industry conference for restaurant owners and fast-food franchisees--typical American small-business owners. Recovery skeptics filled the room, even though some of the franchises represented, such as McDonald's, had weathered the recession fine and others, such as Panera Bread and Green Mountain Coffee, were growing impressively.
Their chief worries are those I described in the first paragraph. One is the difficulty of obtaining working capital. Restaurants need and use credit lines just to operate. Another is the set of cost concerns around President Obama's big plans for health care, energy and union labor. Another is the uncertainty of inflation and commodity prices that determine the cost of food production. Together, these worries are enough to dampen the spirits of small-business owners in the food-delivery industry. True, food delivery is just one industry, but it's a big one.
When the Blue State Obama Administration thinks of small business, it undoubtedly dreams of promising startups churning out solar panels for office buildings or turbine blades for windmills. If its dreams are serious, the Administration should get behind a crackling good idea proposed by entrepreneur Paul Graham. It's called the Founder Visa, and the idea is to make it easy for the world's entrepreneurs to come to the U.S. As Paul Kedrosky describes it on the Web site Growthology: "The particulars are still getting worked through, but it has to do with getting a modicum of [private] funding ($250,000) and approval from an independent board that this represents a real startup deal, not some back-room finagling for a visa, and that's it: You're in the country and you're off and running."
This is a heck of a good long-term idea, and let's hope the Obama Administration embraces it. But for the short and medium term, high-tech startups alone will never return America to 5% unemployment and defuse the commercial-property bomb. Most existing small businesses don't need assistance from the government. What they need is across-the-board relief on taxes. They need benign legislation (or no change) on health care, energy and unions. A wish list, in other words, that runs counter to everything the Obama Administration is currently trying to pass.
Small businesses have always infuriated some liberals. Sinclair Lewis was awarded the Nobel Prize in Literature for Babbitt--the story of a small-minded Realtor in the 1920s. The word "Babbittry" soon became synonymous with "philistine." Liberal writer Michael Lind argues on Salon.com for sacrificing small business at the altar of corporatism in order to pass Obamacare:
"The solution may be corporatism or corporate paternalism--by which I mean the mandatory universalization of private-employer benefits. If the politics of ethnic diversity makes movement in a universalist, social democratic direction impossible in the U.S., then the alternative might be to mandate that all employers provide certain benefits to all employees, with no exceptions. The costs of such unfunded mandates might drive some small businesses out of existence. But small-business owners are the most vocal opponents of wage and benefit reform in the U.S. The replacement of Scrooge & Marley by a smaller number of bigger private and public employers who treat Bob Cratchit and Tiny Tim better would not necessarily be a tragedy."
There you have it: small business as Scrooge! If Obama defender Lind represents the thinking of President Obama and congressional Democrats, then our small businesses are in for a long siege. Hunkered down, they will not expand, hire or defuse the commercial-property bomb. That's a formula for a second recession.
Tuesday, September 8, 2009
Pro Bono Work Helps Firms Fight Economic Slump
Pro Bono Work Helps Firms Fight Economic Slump
Employees Volunteer Services to Charities and Nonprofits, Fostering Potential New Customer Relationships
By RAYMUND FLANDEZ
Some small businesses are following the recession playbook of the unemployed.
Just as many laid-off workers are volunteering more to fill up their free time and enhance their résumés, small-business owners and their employees are doing more pro bono services or volunteer work as a marketing and customer-relations strategy.
The recession hit Studio G Architects Inc. of Boston particularly hard last fall, causing 2008 revenue to drop 30% from the prior year, says Gail Sullivan, the principal. Clients of the 16-year-old architectural firm killed or put on hold 10 projects last October. With work slowing down, the company began providing 15 to 20 hours a week in pro bono services to keep employees occupied and potentially attract future contracts. It worked.
This spring the firm prepared preliminary design projects, such as a playground for severely handicapped children, for various charities. The projects later received full funding and Studio G obtained several contracts, which ranged in value from $16,000 to $100,000. "Offering the pro bono services has given us a chance to maintain our design vigor [and] resulted in people hiring us," Ms. Sullivan says.
For a small business that has lost clients or seen revenue-generating projects dry up, performing free work is a way to keep employees engaged while cultivating new relationships. Donating services to charity groups, churches, schools and other nonprofits can "increase local visibility, deepen local business ties and create opportunity for new business," says Christine Banning, vice president of marketing and communications at SCORE, a Washington-based group that provides free counseling to small businesses.
While it is a strategy that can bear fruit in a tough economy, she warns that small-business owners should set parameters in terms of how much they give away. With charitable giving falling in 2008 for the first time since 1987, dropping about 2% from a year earlier, according to a Giving USA study released last month, more nonprofits could be seeking donations from local businesses.
That is why Robert Politzer, president and chief executive of GreenStreet of New York Inc., made sure his pro bono work can benefit his company in the future.
At a networking event four months ago, Mr. Politzer met the director of the Hudson River Clearwater Sloop Inc., a nonprofit that aims to preserve and protect the Hudson River. Now, the green-building and consulting firm is serving as the volunteer construction manager of the group's new headquarters in Beacon, N.Y. As a public-relations move, GreenStreet is uploading videos on YouTube as it documents the pro bono work.
"This is only going to help expand our network, which should lead to more business for us," Mr. Politzer says.
Indeed, relationships matter now more than ever, says Audrey Murrell, professor of business administration at the Katz Graduate School of Business at the University of Pittsburgh. Those customers who get a first-hand look at a company's expertise during a pro bono project will likely turn to that company later, Ms. Murrell says.
"When there are fewer opportunities, there are more choices of whom people are going to do business with," she says, adding that people are going to "be more influenced by the relationship that you've cultivated."
One of the beneficiaries of eMazzanti Technologies' largesse this year was a local church, which had trouble setting up an outdoor wireless digital sign board. The Hoboken, N.J., technology company worked on the four-month project free of charge, saving the Our Lady of Grace church some $7,000 to $12,000.
In exchange, the company received an endorsement unlike any other. At a Mass, the pastor thanked the company in front of the congregation.
"My wife says, 'It's almost like a referral from God,' " says Carl Mazzanti, the 33-year-old chief executive.
With business ebbing, George Amorim, the co-owner of Divine Catering LLC of Madison, N.J., is offering free food and catering services this summer to local charities, in preparation for more business in the fall, when holiday parties are typically in full swing.
So far this year, he and his five employees have put on a Fourth of July barbecue party at a local children's hospital and donated a cheese tray for a bowling fund-raiser. In September, the company plans to cater a 10K running event. "We're trying to get the word out," says Mr. Amorim, whose business started in 2004 as a caterer for private-jet passengers. "All these things that we're doing now are for the future."
Steve DiFillippo, owner of Davio's, a 24-year-old Northern Italian steakhouse in Boston, shifted 30%, or some $20,000, of the company's advertising budget to pro bono work. This year, he says, not a week goes by that the company doesn't offer its services for charity events, or give away gift cards. Last year, the frequency was every other week.
"It's worth more to do charity work than to advertise in a local magazine," he says. "It's more like guerrilla marketing. People see that we're involved in the community."
Employees Volunteer Services to Charities and Nonprofits, Fostering Potential New Customer Relationships
By RAYMUND FLANDEZ
Some small businesses are following the recession playbook of the unemployed.
Just as many laid-off workers are volunteering more to fill up their free time and enhance their résumés, small-business owners and their employees are doing more pro bono services or volunteer work as a marketing and customer-relations strategy.
The recession hit Studio G Architects Inc. of Boston particularly hard last fall, causing 2008 revenue to drop 30% from the prior year, says Gail Sullivan, the principal. Clients of the 16-year-old architectural firm killed or put on hold 10 projects last October. With work slowing down, the company began providing 15 to 20 hours a week in pro bono services to keep employees occupied and potentially attract future contracts. It worked.
This spring the firm prepared preliminary design projects, such as a playground for severely handicapped children, for various charities. The projects later received full funding and Studio G obtained several contracts, which ranged in value from $16,000 to $100,000. "Offering the pro bono services has given us a chance to maintain our design vigor [and] resulted in people hiring us," Ms. Sullivan says.
For a small business that has lost clients or seen revenue-generating projects dry up, performing free work is a way to keep employees engaged while cultivating new relationships. Donating services to charity groups, churches, schools and other nonprofits can "increase local visibility, deepen local business ties and create opportunity for new business," says Christine Banning, vice president of marketing and communications at SCORE, a Washington-based group that provides free counseling to small businesses.
While it is a strategy that can bear fruit in a tough economy, she warns that small-business owners should set parameters in terms of how much they give away. With charitable giving falling in 2008 for the first time since 1987, dropping about 2% from a year earlier, according to a Giving USA study released last month, more nonprofits could be seeking donations from local businesses.
That is why Robert Politzer, president and chief executive of GreenStreet of New York Inc., made sure his pro bono work can benefit his company in the future.
At a networking event four months ago, Mr. Politzer met the director of the Hudson River Clearwater Sloop Inc., a nonprofit that aims to preserve and protect the Hudson River. Now, the green-building and consulting firm is serving as the volunteer construction manager of the group's new headquarters in Beacon, N.Y. As a public-relations move, GreenStreet is uploading videos on YouTube as it documents the pro bono work.
"This is only going to help expand our network, which should lead to more business for us," Mr. Politzer says.
Indeed, relationships matter now more than ever, says Audrey Murrell, professor of business administration at the Katz Graduate School of Business at the University of Pittsburgh. Those customers who get a first-hand look at a company's expertise during a pro bono project will likely turn to that company later, Ms. Murrell says.
"When there are fewer opportunities, there are more choices of whom people are going to do business with," she says, adding that people are going to "be more influenced by the relationship that you've cultivated."
One of the beneficiaries of eMazzanti Technologies' largesse this year was a local church, which had trouble setting up an outdoor wireless digital sign board. The Hoboken, N.J., technology company worked on the four-month project free of charge, saving the Our Lady of Grace church some $7,000 to $12,000.
In exchange, the company received an endorsement unlike any other. At a Mass, the pastor thanked the company in front of the congregation.
"My wife says, 'It's almost like a referral from God,' " says Carl Mazzanti, the 33-year-old chief executive.
With business ebbing, George Amorim, the co-owner of Divine Catering LLC of Madison, N.J., is offering free food and catering services this summer to local charities, in preparation for more business in the fall, when holiday parties are typically in full swing.
So far this year, he and his five employees have put on a Fourth of July barbecue party at a local children's hospital and donated a cheese tray for a bowling fund-raiser. In September, the company plans to cater a 10K running event. "We're trying to get the word out," says Mr. Amorim, whose business started in 2004 as a caterer for private-jet passengers. "All these things that we're doing now are for the future."
Steve DiFillippo, owner of Davio's, a 24-year-old Northern Italian steakhouse in Boston, shifted 30%, or some $20,000, of the company's advertising budget to pro bono work. This year, he says, not a week goes by that the company doesn't offer its services for charity events, or give away gift cards. Last year, the frequency was every other week.
"It's worth more to do charity work than to advertise in a local magazine," he says. "It's more like guerrilla marketing. People see that we're involved in the community."
Wednesday, June 10, 2009
In Recession Specials, Small Firms Revise Pricing
In Recession Specials, Small Firms Revise Pricing
Discounts and Lower-End Offerings Help Lure Cash-Strapped Customers; Vans Complement Limo Service's Town Cars
By DANA MATTIOLI
Some small businesses are overhauling their pricing strategies amid the recession and finding new growth through lower-end offerings and discounts.
Towerstream Corp., a company that delivers high-speed Internet access to businesses, last year began finding it harder to gain and keep clients for an eight-megabit-per-second offering that then cost $999 a month.
In January, the company introduced a midrange product offering five-megabits-per-second for $500 a month, a price Chief Executive Jeff Thompson says he thought would be more palatable to cash-strapped customers. Although the average ticket item's price decreased as a result, the company had a record quarter for installations and revenue increased 64% in the first quarter from a year earlier. Towerstream, based in Middletown, R.I., this week lowered the price of its $999 plan to $899.
Lone Star Limousine, a transportation company based in Palo Alto, Calif., introduced lower-priced options in response to the economy. As companies cut back on spending, Lone Star noticed less-frequent limousine use. That, coupled with executives wary of the image they were sending by traveling in flashy limousines, prompted co-owner Jen Jaciw to take a different approach.
A year and a half ago the company added a van to its fleet of limousines, town cars and high-end sport-utility vehicles. The van, which was less ostentatious, cost less to rent and allowed the company to expand its client base. Ms. Jaciw says as the economy worsened, wedding parties and companies started choosing the van over limos. In March 2009 Lone Star bought another van to keep up with demand. "We established ourselves as a high-end luxury option, but it seemed like the right thing to do so we had a more economical option to offer," she says.
To supplement corporate accounts under pressure, Ms. Jaciw sought partnerships with different kinds of clients. She reached out to hotels, wineries, wedding venues and other businesses that might want to charter the vans. The efforts are paying off. Lone Star's gross is up $20,000 over the first quarter last year and the company hopes to gross $1 million by year end.
Other small businesses have found success by identifying rising costs customers were facing and trying to alleviate the burden. Facing flat sales as consumers delayed automotive repairs, Mike Cook, owner of Mr. Transmission of Marietta, Ga., considered offering incentives. Knowing that justifying a major repair in the wake of an economic downturn was becoming harder, Mr. Cook began offering food and gasoline vouchers to customers who had transmission overhauls, which account for 90% of his business.
In December he began working with a partner to offer $500 gasoline certificates with a transmission overhaul, which generally costs between $1,800 and $5,000. In January, he extended the program so the vouchers could be used for food as well. Customers get $25 a month on a Visa cash card for 20 months, which can go toward purchases at retailers such as Costco, BP and Shell.
"I think it makes it easier for them to go ahead and make that repair because they'll get some help with other expenses," Mr. Cook says. Although he declines to disclose how much the vouchers cost him, he says the fee is nominal. Mr. Transmission has recorded a 60% increase in sales so far this year compared with the year-earlier period, and Mr. Cook says the voucher program is partly the reason.
CouponCabin.com, a Chicago-based company that provides discount codes for online shopping, has seen its Web traffic rise amid the recession, with a 300% increase in visitors to the site during the fourth quarter from a year earlier.
For the six years since CouponCabin launched it had been focused primarily on soft goods such as clothing and home goods. But in November 2008, President Scott Kluth started to notice a surge of interest in grocery coupons, after years of declining consumer activity around them in the market. On April 15, the company launched a grocery-coupon section where visitors could print coupons to use at their local supermarkets. CouponCabin nets a few cents per print from each item's manufacturer.
"As long as people have to eat, adding groceries to the site was another way for visitors to save money," Mr. Kluth says. The section has become a hit with visitors and even attracted a new demographic of older users. When the section was introduced it had 14,000 coupons printed in two weeks, with more than 100,000 prints in May. Recently, a technology glitch caused grocery coupons to be temporarily unavailable, and Mr. Kluth says the angry comments from visitors made it clear that they value the addition. He plans to expand the section.
Write to Dana Mattioli at dana.mattioli@wsj.com
Printed in The Wall Street Journal, page B5
Discounts and Lower-End Offerings Help Lure Cash-Strapped Customers; Vans Complement Limo Service's Town Cars
By DANA MATTIOLI
Some small businesses are overhauling their pricing strategies amid the recession and finding new growth through lower-end offerings and discounts.
Towerstream Corp., a company that delivers high-speed Internet access to businesses, last year began finding it harder to gain and keep clients for an eight-megabit-per-second offering that then cost $999 a month.
In January, the company introduced a midrange product offering five-megabits-per-second for $500 a month, a price Chief Executive Jeff Thompson says he thought would be more palatable to cash-strapped customers. Although the average ticket item's price decreased as a result, the company had a record quarter for installations and revenue increased 64% in the first quarter from a year earlier. Towerstream, based in Middletown, R.I., this week lowered the price of its $999 plan to $899.
Lone Star Limousine, a transportation company based in Palo Alto, Calif., introduced lower-priced options in response to the economy. As companies cut back on spending, Lone Star noticed less-frequent limousine use. That, coupled with executives wary of the image they were sending by traveling in flashy limousines, prompted co-owner Jen Jaciw to take a different approach.
A year and a half ago the company added a van to its fleet of limousines, town cars and high-end sport-utility vehicles. The van, which was less ostentatious, cost less to rent and allowed the company to expand its client base. Ms. Jaciw says as the economy worsened, wedding parties and companies started choosing the van over limos. In March 2009 Lone Star bought another van to keep up with demand. "We established ourselves as a high-end luxury option, but it seemed like the right thing to do so we had a more economical option to offer," she says.
To supplement corporate accounts under pressure, Ms. Jaciw sought partnerships with different kinds of clients. She reached out to hotels, wineries, wedding venues and other businesses that might want to charter the vans. The efforts are paying off. Lone Star's gross is up $20,000 over the first quarter last year and the company hopes to gross $1 million by year end.
Other small businesses have found success by identifying rising costs customers were facing and trying to alleviate the burden. Facing flat sales as consumers delayed automotive repairs, Mike Cook, owner of Mr. Transmission of Marietta, Ga., considered offering incentives. Knowing that justifying a major repair in the wake of an economic downturn was becoming harder, Mr. Cook began offering food and gasoline vouchers to customers who had transmission overhauls, which account for 90% of his business.
In December he began working with a partner to offer $500 gasoline certificates with a transmission overhaul, which generally costs between $1,800 and $5,000. In January, he extended the program so the vouchers could be used for food as well. Customers get $25 a month on a Visa cash card for 20 months, which can go toward purchases at retailers such as Costco, BP and Shell.
"I think it makes it easier for them to go ahead and make that repair because they'll get some help with other expenses," Mr. Cook says. Although he declines to disclose how much the vouchers cost him, he says the fee is nominal. Mr. Transmission has recorded a 60% increase in sales so far this year compared with the year-earlier period, and Mr. Cook says the voucher program is partly the reason.
CouponCabin.com, a Chicago-based company that provides discount codes for online shopping, has seen its Web traffic rise amid the recession, with a 300% increase in visitors to the site during the fourth quarter from a year earlier.
For the six years since CouponCabin launched it had been focused primarily on soft goods such as clothing and home goods. But in November 2008, President Scott Kluth started to notice a surge of interest in grocery coupons, after years of declining consumer activity around them in the market. On April 15, the company launched a grocery-coupon section where visitors could print coupons to use at their local supermarkets. CouponCabin nets a few cents per print from each item's manufacturer.
"As long as people have to eat, adding groceries to the site was another way for visitors to save money," Mr. Kluth says. The section has become a hit with visitors and even attracted a new demographic of older users. When the section was introduced it had 14,000 coupons printed in two weeks, with more than 100,000 prints in May. Recently, a technology glitch caused grocery coupons to be temporarily unavailable, and Mr. Kluth says the angry comments from visitors made it clear that they value the addition. He plans to expand the section.
Write to Dana Mattioli at dana.mattioli@wsj.com
Printed in The Wall Street Journal, page B5
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