Six Steps Governments Need to Take to Help Small Businesses

Thank You for Shopping LocalSmall businesses and startups are the backbone of the American economy, and according to a report done by Tim Kane for Kauffman Foundation:

[W]ithout startups, there would be no net job growth in the U.S. economy. This fact is true on average, but also is true for all but seven years for which the United States has data going back to 1977…. Startups create an average of 3 million new jobs annually. All other ages of firms, including companies in their first full years of existence up to firms established two centuries ago, are net job destroyers, losing 1 million jobs net combined per year.

As we go through the political drama of the “sequestration,” the truth of matter is that the only way to reduce the deficit is by reducing unemployment. According to an article written by Business Insider‘s executive editor Joe Weisenthal:

History is pretty clear on how you reduce the deficit: Get growth, and reduce unemployment.

We ran this chart earlier this week to show how nicely deficit/GDP and the unemployment rate correlated with each other. Throughout these decades tax and spending policies have changed a lot, but it clearly hasn’t mattered. When unemployment drops, deficit/GDP drops. When unemployment rises, deficit/GDP rises. Growth is the only deficit reduction policy that matters. Deficit-GDP

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Combating Groupon-type Deals Sucking $280M from Independent Restaurants

The Gramercy Tavern

Gramercy Tavern selected 2nd best restaurant in the United States by a panel of 176 food critics for The Daily Meal

In 2011, Americans ate out 60.6 billion times. That’s down from 62.7 billion in 2008 and flat compared to 2010. Of the 2.1 billion visits lost, 2 billion would have been to independent establishments.

This lost of visitors was compounded by daily deal providers sucking value away from local merchants. In 2011, revenue for daily deal providers like Groupon grew 138% but visits to independent restaurants were down 4%. According to Bill Bice of Coverboom this works out to $280M lost by independent restaurant owners.

“The number one way small businesses can compete with chains is by nurturing the relationships they have with the customer,” says Joe Erickson, editor of RestaurantOwner.com, an online resource and networking tool for independent restaurateurs. “Collect their names, birthdays, anniversaries, and their specific likes, and use that [information] to start a direct mail campaign.” Continue reading

Does Your Business Get Women?

A Shopping Machine

• Most small business owners don’t get women yet two women in a store is a shopping machine.

Did you know?

At home, the majority of women (90 percent) still control the family’s purse strings, from stocking up on household items to having the final say on home and car purchases and health care.

Read more: http://www.businessinsider.com/infographic-women-control-the-money-in-america-2012-2#ixzz2KcusOnpj

Consider the following:

  • Most small business owners don’t get women yet two women in a store is a shopping machine.
  • There’s a very strong consumer bias for well-run local businesses. Look at the popularity of farmers markets. But it has to have an energy, freshness and evangelical joy to it.
  • Don’t neglect cleanliness. Hygiene is very important, especially to women.
  • Most women will U-turn and leave an aisle if it’s so narrow that another shopper gives them a “butt-brush.”
  • New windows and reorganization on the floor is necessary to create a sense of evolution that brings excitement to the space.
  • Engage all five senses. Shoppers are conscious of what they see, taste, smell, touch and hear. Sense marketing is an inexpensive way to impact the customer experience.
  • 85% of people have used the Internet to search for local businesses, yet only 3 percent of small business total advertising dollars flowed online, compared to as much as 16 percent for big companies.

Would you like to attract more women shopper? Consider sponsoring The ZinC HoPLo Lab:

The ZinC HoPLo Lab looks to address this situation by teaching girls skills. They will start by learning the basics of computer science and programming in this unique course taught by David Evans and Terrance Jackson. In this course they will build a working search engine. Google is the most well-known and popular search engine.

This course is a blended model of on-line instruction and in-person instruction. Students progress through the content of the course, on-line, with David. But students also meet weekly with other students and Terrance to work additional problems, share with and help each other, and have their questions answered directly.

For more information on the on-line content, click here and watch the video.

https://startupwestchester.wordpress.com/2012/12/15/the-lovelace-hopper-lab/

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Pistis, Building Strong Communities

Royal Portal Chartres

The Royal Portal at the Cathedral of Our Lady of Chartres. Some say these images are direct references to scenes described in the ancient Coptic Gnostic text, The Pistis Sophia.

Groupon grew out of a social activist website called “The Point” to became the fastest growing company ever with a great idea that seemed to serve the needs of small business owners. “The Point” got its name from The Tipping Point: How Little Things Can Make a Big Difference, a book by Malcom Gladwell: “The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts.”

Yet this great idea at Groupon treated people as merely consumers and not human beings; and in hindsight, it is very obvious that this great idea would never turn into a great innovation. The difference between merely having an idea and real innovation can be like the difference between masturbating and having a baby. People enjoy looking at baby pictures; no one wants to see stains on a sheet.

Pistis Database Services is creating real innovation and real value for local communities by understanding people as human beings, not consumers.

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Let America Be America Again

America’s problem is not that it does not work like China. It is that it no longer works like America. ~ Richard McGregor

[T]his paper shows that without startups, there would be no net job growth in the U.S. economy. This fact is true on average, but also is true for all but seven years for which the United States has data going back to 1977…. Startups create an average of 3 million new jobs annually. All other ages of firms, including companies in their first full years of existence up to firms established two centuries ago, are net job destroyers, losing 1 million jobs net combined per year. ~ The Importance of Startups in Job Creation and Job Destruction by The Kauffman Foundation

http://www.kauffman.org/uploadedfiles/firm_formation_importance_of_startups.pdf

[A] critical aspect of improving the U.S. economy is actually improving the small business economy and making it easier to start a business and to grow small businesses.

http://techonomy.com/2012/09/techonomy-detroit-jack-dorsey-on-building-startups-and-becoming-mayor/

[A] magisterial study by Deloitte’s Center for the Edge… shows the rates of return on assets and on invested capital for 20,000 US firms from 1965 to 2011. It shows that “managerialism” has been steadily failing for the last half century.

Economy-wide Return on Invested Capital

The graphic shows that something has gone so terribly wrong with the US private sector—the supposed engine of economic growth and the supposed creators of jobs. When the best firms have rates of return on assets or on invested capital of, on average, just over one percent, we have a management catastrophe on our hands.

An ROA of just over one percent means that firms are dying faster and faster: the life expectancy of firms in the Fortune 500 is now less than fifteen years and declining rapidly. Continue reading