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In the midst of this chilly recession that doesn’t look like it is going anywhere any time soon, there has been a lot of talk about how difficult it is to start, operate and grow a small business. But even the darkest clouds can come with their silver lining. Much emphasis could be made on the unique opportunities that result from such an economic climate. History attests to the fact that from the ashes of recession spring forth new ideas, opportunities, and insight.  

Here are 8 reasons why our economic recession can be a good thing for small businesses:

 1. Businesses are being forced to become stronger and more focused. In the quest to reduce costs, improve efficiency, and increase sales, small businesses are being forced to redefine and refocus themselves. As a result, many businesses are streamlining their operations, improving quality control, and expanding their customer relations.

2. Expansion comes at a discount. Small businesses looking to expand can take advantage of huge discounts in real estate, labor, materials, and stocks.

3. New markets are emerging. A change in the economic climate often signals a transformation in consumer demand and business needs. This shift in demand spells opportunity for anyone who has the foresight and resources to capitalize on it. So a homebuilding company or a cleaning company, for example, could make money refurbishing foreclosed homes, and a restaurant could offer economical menu options.

4. Demand for support will result in better products and services. As small businesses seek to reduce expenses and maintain their competitive edge, they will increasingly rely on various products and services to help them achieve their goals. Think telecommunications equipment and software, SaaS, cloud computing, and a whole range of outsourcing services- all of which should develop and improve in response to the increase in demand.

5. Small businesses are reaching out. Small business owners across the country and the world are joining forces to share advice, support, experiences, and resources. Much of this networking has been made possible via social networking sites and other online communities. Aside from the physical benefits that could come from such collaboration, even the emotional support that can be derived from these communities can go a long way towards helping small business owners and budding entrepreneurs.

6. Relationships with customers will strengthen. In order to hold on to their customers, small businesses are being forced to get to know them better. When businesses are in touch with the needs of their clientèle they are in a better position to accommodate any shifts in demand.

7. Businesses will find creative ways to get financing. According to the Small Business Administration, loans to small businesses have dropped 30% over the last year. This opens the door to the world of alternative financing that ranges from Peer-to-Peer lending and other sources of private equity, to factoring receivables, receiving a business cash advance, tapping private foundations, and even bartering.

8. Less competition from the big guys. Due to sluggish sales, several big US retailers, such as HomeDepot, Circuit City, Starbucks, Ann Taylor, CompUSA, and Foot Locker, have been closing their stores across the country. Put simply, this means less competition and more opportunity for small businesses.

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Strangely enough I saw a great commercial yesterday. It came on just as I turned on the TV.

It’s for the Navy Seals:

No words, just the excitement about being a Navy Seal. Join us and you too can become an elite, “stealth” soldier. Then I went to the website Navy.com and they further supported the campaign.

I thought it was right on brand. What are your thoughts?

Tivo and DVR’s across the land are killing adverting on TV. In a recent study Tivo says that the more popular a show the greater the chance for the user to fast forward through commercials.

Here’s a tidbit from me.

I fast forward through EVERY commercial EVERY time. Period.

The only time I ever watch a TV commercial is when I’m watching “live” TV and I try never to do that.

What’s that mean to company’s purchasing TV time? That’s the question I’d pose to my Ad Agency. What are your thoughts? Do you still watch commercials?

What a day yesterday. The Obama brand took over the White House with quit a splash. I’ve never seen anything like the enthusiasm I saw yesterday. Change is here…

Then the stock market dropped over 300 points, the most in inauguration history. I guess folks investing weren’t so happy.

It’s going to be interesting to see how long this rockstar brand image lasts. I know I’m going to be holding Obama to his promises. In the past politicians usually break their promises but Obama can’t do that. He made it clear that he was the change needed so, the proof will be in the pudding.

Where do you think the Obama brand will go?

All the pomp and circumstance surrounding the inauguration of Barack Obama as U.S. President underscores a new flurry of business activity that shines like a small ray of hope in our dismal economy.

The San Francisco Chronicle recently reported that numerous entrepreneurs and small business have rushed to capitalize on Obama’s rise to the presidency. Just think about it. There are many angles to promote here. There is the historical significance of a electing the first black president, the fresh promise of change in an economy that has gone stagnant, and you can add to this the fact that Obama is young, photogenic, and charasmatic- all of which no doubt greatly add to his marketability.

But the surge in business goes beyond Obamamania. Several green businesses have already benefited from the environmentally conscious inaugural preparations, and the alternative-energy industry has also experienced a recent boost in investment and sales.

Whether this activity signals a prolonged boost for many small businesses still remains to be seen, especially since many small business owners are wary about Obama’s economic stimulus plan.

But for now at least we can hope…

What do you think?

Image credit: Flickr user 

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How loyal are you to the brands you adore? What does it take to make you leave a brand you love? I thought about that as I watched TV this morning. It became obvious to me that consistency and quality always need to be maintained.

This year I dropped a lot of TV shows that I really liked. I stopped watching Private Practice, Desperate Housewives and Grey’s Anatomy. I used to watch all these shows with my wife but now I find them to be goofy and unrealistic. The quality and consistency that originally made me like them has dramatically changed. Now I don’t watch them.

Brand loyalty is fragile and requires constant upkeep. Are you keeping up?

Whether you’re the kind of person who likes to see the glass as half full or you prefer to see it as half empty, there is no denying that for most American small businesses the new year will bring a mixed bag of opportunity and adversity, hope and anxiety. There are many reasons for the apparent paradox. The up coming year will very much be shaped by the current financial and economic crisis engulfing America and the rest of the world, the beginning of an new Presidential term in the U.S., and the continued evolution and development the Internet, mobile technology, and consumer electronics.

Here is a closer look what small businesses can expect in 2009:

1. The number of small businesses is expected to grow. With the unemployment rate climbing and job security being challenged across the board, many will try their luck with small and personal businesses. A large percentage of this population will consist of Gen Y and Babyboomers.

2. Flexibility and innovation reign supreme. To survive the tough economic conditions, small businesses will need to increase their productivity, efficiency and customer value. This will compel many businesses to be creative in the way they operate and in the products and services they offer.

3. A year of bootstrapping and belt tightening. With consumer confidence at the lowest it has been in years, and many industries effected by sluggish consumer spending, small businesses will need to focus on improving their cash flow, reducing costs, and holding on to their customers.

4. Less legitimate funding for small businesses. 2009 promises to be a hard year for small businesses in need of financing. The banks as well as all sorts of commercial and private lenders are pulling in the reigns when it comes to offering money to entrepreneurs and small companies. Simultaneously, expect an increase in predatory lending schemes and their “barely legal” equivalents, such as payday cash loans.

5. Mobile technology provides necessary tools. Mobile technology will continue to offer small businesses the ability to boost productivity, efficiency, and market outreach in order to maintain a competitive edge and hold on to customers. Expect the continued growth and usage of navigation systems, location-based services, smart phones, netbooks (small notebooks primarily used for Internet access), and a whole slew of mobile applications.

6. Expect cloud computing and SaaS to remain strong. Both cloud computing and Software as a Service (SaaS) offer essential tools that can help a wide variety of small businesses. Cloud computing allows small businesses to remotely manage and store information as well as access customized software or services from virtually any device with Internet access, while SaaS refers specifically to an application that is provided as a service across the Internet. Not only can small businesses access sophisticated and powerful applications that have previously only been available to bigger businesses, but they can reduce their expenditures on software and equipment.

7. Small businesses broaden their use of online marketing tools. Over the past few years, the Internet has opened up a whole new marketing frontier for small businesses. While websites, blogs, emailing, online listings, POI databases, and social networking sites such as Facebook, Twitter, LinkedIn, and MySpace may all sound like “old news,” many small businesses have yet to jump on the bandwagon. But not for long. These online tools will continue to provide small businesses with vital access to current and potential customers and that should win over a lot of “late-comers.”

8. The Government has its eyes on infrastructure. President-elect Barack Obama has pledged to increase federal spending on bridges and roads across America, as well as projects for the development of alternative energy sources, clean technology and education. Several small businesses will benefit directly from the federal spending increase by accepting specialized government contracts, and many other small businesses may benefit indirectly by providing goods and services to large contractors.

9. Consumers turn to bargain hunting. Being extravagant and excessive is loosing its cool. With job security declining, incomes shrinking, and debt running high, consumers are trying to stretch their dollars as far as they will go. Expect this trend to continue in the coming year as the future of the economy still remains uncertain.

10. Still going green. The demand for organic, sustainable, and green products should remain strong in certain sectors. But in addition to caring for the environment, consumers and businesses will be drawn to the “secondary” benefits of cost savings and improved efficiency that many green products have to offer.

11. Old school marketing techniques make comeback. With fewer dollars to spend on marketing, small businesses will turn to the tried and true strategies: building up word of mouth advertising, sending out direct mail and coupons, improving customer service, and offering sample products or free trials.

12. Opportunity knocks. With huge discounts on labor, materials, real estate, and stocks, common business sense dictates that a recession is a good time to expand operations. This idea is supported by the likes of Richard Branson and Warren Buffet (and you can’t really argue with them!). Expect that those who have the means will take advantage of the economic downturn to expand or develop their businesses.

Image Credit: Flickr User

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In the US Virgin Islands a small, family run business made some really great premium rum.

Eight generations of the Nelthropp family have perfected the delicate balancing, blending and aging of the rum. Cruzan is considered to be one of the “cleanest” rums on the market based on the brand’s distinctive distillation process. Cruzan mixes high quality molasses with tropical rainwater, which, through fermentation, is turned into alcohol. The liquid is then run through a five-column distillation process that removes any unwanted elements before being stored away in handcrafted oak barrels to age. This creates distinctive tasting rum – smooth, clean and full-bodied.

For a long time “Cruzan” rum dominated the market place. Tourists threw down their Captain Morgan and Bacardi Rum drinks with distaste. Bring on a Cruzan they screamed.

Walk into any bar in the US Virgin Islands and ask for a dark rum and Coke and it’s ASSUMED that you just ordered Cruzan and that’s what is made. That’s some pretty good stuff if you’re the Cruzan company.

A few years ago you couldn’t find Cruzan in the states. You had to come here to get your fix. Making it hard to get increased its intoxication. Hard to get stuff tastes a lot better than some old bottle out of Joe’s Spirits on the corner.

Well Cruzan just sold out to a big company called Fortune Brands. What do they do with one of the most talked about hidden jewels of rums?

Change it, of course. Smart huh?

Gone is the original (very successful) logo and bottle design. In fact the bottles appear to be smaller (less rum) and the dark rum appears to be lighter?

Here is the old logo and bottle design:

Some points of interest: At the neck there is a raised emboss of a “pirate ship” which blends with island heritage. You can also see the number 2, which means this bottle was aged for 2 years. The older the bottle the more expensive it is. It’s like a badge of honor to give someone a bottle that’s been aged for a long time.

Here’s the new logo and bottle design:

Gone is the ship and numbering system. Big mistake! The font looks Asian. Here’s what Fortune Brands had to say:

DEERFIELD, Ill.– (BUSINESS WIRE) — Beam Global Spirits & Wine, Inc. [Fortune Brands, Inc. (NYSE:FO)], a global leader in premium spirits, is proud to announce the addition of Cruzan® Rum, the fifth-largest and fastest-growing rum brand in the United States, into the Beam Global family. This 250 year-old brand joins the Beam Global portfolio with a fresh logo and sleek bottle shape reflective of the Cruzan craftsmanship, premium quality and rich family tradition.

The brand sold approximately 750,000 cases of premium rum worldwide in 2007 and grew by 23 percent last year in the United States, the brand’s largest market. Cruzan is also sold in the Caribbean, Canada, Spain and the Nordic countries. Cruzan is available in the United States in 50 ml, 200 ml, 375 ml, 750 ml, 1L and 1.75L bottles.

So what do you do with a growing, successful brand? Make changes right? What do you think, did the brand need a change? Or is Fortune messing with tradition? And does anyone think they’ll put the same love and passion into the rum making process?

I recently came across this article in the English Observer that put words to a new cultural and economic reality that is taking shape here in the U.S.:

…The era of individualistic consumption that swept aside the Great Society of the 1960s has come to an end. For three decades, American culture has celebrated the glories of unabashed capitalism and the ideals of the rich. No longer. From Hollywood movies to celebrity culture to television, frugalism is taking hold. Consumers are cutting back… A national belt-tightening is having an impact on everything from restaurants and books to a collapse in the demand for cosmetic surgery. The recession is reshaping the cultural landscape in which ordinary people live their lives.

For many small businesses to succeed in this changing environment they will need to change or improve the way that they operate. With a new year beginning it is the best time for business owners and management to take stock of their business performance in order to plan for the future.

To help get you started, here are my picks for the top small business resolutions in 2009. Some may apply to your business; others may not. But the main thing to keep in mind is that to be successful in this new environment any resolutions that you set for your business should stay within, yet at the same time optimize, your available resources.

1. Make a plan. Before you can make any resolutions, you need to be focused on where you want your business to go. Look for areas of improvement and set realistic goals. Do you need to strengthen sales, improve customer service, smooth out your cash flow, increase efficiency? In the end, your plan will be an outline of sorts for all of your resolutions.

2. Improve communication and collaboration with your employees. Your employees are one of your greatest assets- and you should treat them that way. Not only are they intimately involved in the nitty-gritty operations of your business, but they are often your link to your customers. Invite your employees to offer their ideas, questions, and comments for how they can do their jobs better and how the business can improve. Even if you do not get any implementable feedback, make sure your employees know that you seriously considered their suggestions, and they will automatically be more motivated and more productive at work.

3. Strengthen relationships with your customers. In the current economic climate, customer loyalty is a precious commodity. Make sure that you are checking in with your customers about their experience doing business with you. Their feedback, comments, and suggestions may also help you to provide a better quality and more focused product or service. And like your employees, let your customers know that you considered what they had to say, even if nothing was implemented. You should also try to look for ways to reward or acknowledge your repeat customers.

4. Research and implement cost-cutting techniques. Look for simple and effective ways to reduce expenses. Some examples: 1. Buy energy saving products, such as CFL light bulbs and look into other resource conserving practices. 2. Improve product and supply inventory management so that capital is not unnecessarily tied up in overstocked on unused items. 3. Join a discount shopping club or make joint purchases with other businesses. 4. Look for ways to reduce employee benefits and health care costs.

5. Improve your cash flow. By smoothing the flow of capital in and out of your business, you will be able to run more efficiently and be in a better position to make decisions that can enhance your business, such as whether or not to purchase new equipment. Basically, you will need to take a look at your inventory, your accounts payable and your accounts receivable. In my previous post Keeping Your Business Out of Debt, I included some details on how to improve your cash flow.

6. Make quality control a priority. Make it a point to establish methods of assessing the quality and reliability of the products and/or services that your business provides. Put simply, the greater the quality of the products and the more reliable the service that your customers can get for their money, the more that your customers will want to use your business. Here also it is important to get customer feedback.

7. Pursue creative and low-cost marketing techniques. In two of my recent posts, I outlined several marketing strategies to promote your business without taking a big bite out of your budget. Some additional ideas: attach an informative signature on your outgoing emails, send a press release when your offer a new product or service or if you make an event that involves the community, write online articles for ezines.

8. Seek out advice and support. With a challenging year up ahead, it is important that you build a “support system” that will help you focus, clarify, and actualize your business goals. This support could come from coaches, mentors, hired professional consultants, or other small business owners. For starters, you can check out your local SCORE chapter or Micromentor.org, or join your local chamber of commerce (to connect to other business owners). You could also join an online small business community.

9. Assess your progress. Make sure to set aside a few minutes every week to assess how your business is doing. What you chose to focus on in that time will be specific to your business, but some common areas to look at include: sales and inventory reports, cash flow statements, and ROI on current marketing strategies.

10. Remember to have fun! Running a small business usually involves a great deal of responsibility and and a great deal of stress- especially these days. Knowing how to lighten things up for yourself and your employees is an invaluable tool to improve productivity and build a loyal workforce. If you are a bit challenged in the creativity or sense of humor department, here are some common ideas: planning an inexpensive employee get-together, outing, or event (Why not go to the local park for a potluck picnic or invite someone to give a seminar), running contests that showcase employee contributions, let employees creatively decorate their own workspaces, or play music at work. And for some business humor.. check out this page.

Image credit: nicolas.boullosa 

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Now here’s something tangible. Buy a new Hyundai and if you lose your job within a year they’ll take it back.

“In this uncertain economy, we are looking for ways to reassure shoppers that Hyundai still represents the best value in the auto industry,” said John Krafcik, president and chief executive of Hyundai Motor America, the U.S. arm of the South Korea-based automaker, in a company statement.

“If you find that you cannot make your payment because of a covered life changing event, we’ll allow you to return your vehicle and walk away from your loan obligation - and in most cases we will cover most, if not all of the difference,” the carmakers Web site says.

You can read the full story here.

I like it, what do you think?