--Taken From the Los Angeles Times
As they work to overhaul the nation's healthcare system, President Obama and his congressional allies have pledged to help small-business owners such as Rhonda Ealy and Kelli Glasser.
Ealy, who owns a coffee roasting company in Bend, Ore., has put off buying new equipment so she can offer health benefits to her 13 full-time employees. Glasser, whose firm outside Dayton, Ohio, makes museum and trade-show exhibits, has had to lay off 20 people in part to continue providing insurance to her 87 employees.
Both businesswomen desperately want help. But they have strongly divergent views about what Washington should do, reflecting a broader debate about how to relieve the burden on the nation's roughly 6 million small businesses.
That difference of opinion is fast becoming one of the most intense points of debate in the president's drive to expand health coverage and control the nation's growing healthcare tab.
Ealy loves a Democratic proposal to create a government-run insurance plan, which she hopes will allow her to get her employees better coverage for less. "We're looking for options," she said.
Glasser hates a separate provision in the legislation that would place a new requirement on many businesses to cover their employees. "It's going to make for some very tough choices," she said.
The two women are watching anxiously as Democrats work to pull together healthcare bills they hope to vote on this fall.
There is little dispute that the relief is urgently needed.
On average, businesses pay nearly $4,000 a year to provide insurance for a single worker and more than $9,000 a year for workers with family coverage. That's more than double what they paid a decade ago, according to an annual survey by the nonprofit Kaiser Family Foundation and the Health Research and Educational Trust.
"It's heartbreaking out there," said Kevin Galvin, who owns a commercial maintenance business outside Hartford, Conn., and can't afford to provide health benefits.
Galvin heads a group called Small Businesses for Health Care Reform, which pushed for a new government insurance plan in Connecticut. He said the demand for help is so strong that in less than six months the coalition has attracted 19,000 members.
Congressional Democrats have developed a complex series of proposals they say will control the insurance premiums that bedevil Galvin and millions of other small-business owners.
The foundation of their plan is a new and regulated insurance marketplace, or exchange, where individuals and small businesses -- perhaps those with fewer than 50 employees -- would be able to shop for a range of plans that meet basic standards. The standards would be established by the federal government.
The exchange would feature private plans as well as a new government insurance program, which advocates say would put pressure on commercial insurers to lower their costs and improve quality. Critics contend it could drive private insurers from the market, leaving consumers dependent on the government alone for their coverage.
Some businesses with small payrolls and low salaries also would qualify for government aid to help cover their share of employees' premiums.
While offering new aid, Democratic leaders also would place new requirements on businesses. Under bills developed in the House and Senate, businesses above a certain size would be subject to a penalty if they did not provide employees with health benefits.
"If you're providing health insurance, that's great, and we're going to help you," President Obama explained last week at a town hall meeting on healthcare that he hosted in Virginia. "But if you're not providing health insurance, then you need to pony up a little bit of money to help pay for the fact that somebody, somewhere, is going to be taking care of your employees' healthcare."
That arrangement suits Ealy in Oregon.
Depending on where lawmakers put the cutoff, she might be subject to a mandate to provide coverage to all her workers. But the 41-year-old business owner, who founded Strictly Organic Coffee Co. 10 years ago with her husband, said she would like to be able to do that.
Now, with margins so thin that she and her husband skip vacations and barely pay their mortgage every month, she said she could afford coverage only for her full-time employees, leaving 12 part-timers to fend for themselves.
Three years ago, the premiums cost her about $2,112 a year per employee. This year, the premiums jumped to $3,420 for a less generous policy.
"I don't know how long we'll be able to keep it up," she said.
Ealy is looking forward to shopping for insurance in a new exchange, which she believes would help bring down costs and give her a chance to get into a lower-cost government option.
"If there is a mandate that comes with help, I'll take it," she said.
In Ohio, Glasser, whose business might be too large to qualify to buy insurance through the exchange, is more skeptical. She has 87 employees and a $5-million payroll.
The 39-year-old president of Exhibit Concepts Inc. has had to scale back the benefits she offers her employees and ask them to pay more.
Today, the company picks up about two-thirds of the cost of insuring its employees: $1,786 a year for each employee with an individual policy and $4,450 for each employee with a family plan.
Workers pay the remainder of the premium and have a $5,000 deductible for an individual plan and a $10,000 deductible for a family plan.
Glasser now fears that the government will force her to provide more generous coverage that she can't afford.
Provisions in the House and Senate healthcare bills would give federal regulators the authority to determine what kind of insurance satisfies the employer mandate.
"We work very hard to offer the very best health benefits that we can and stay within our means," Glasser said. "To have it dictated to us by the government is really disconcerting."
Obama and his congressional allies are counting on business owners like Ealy to rally behind their proposals, as many already have.
But with several small-business organizations fiercely opposed to the new mandate, the debate is far from settled.
A proposal in the House bill that would impose a surtax on families making more than $380,000 a year is also fueling criticism that a few small-business owners might be hit. (About 4% of small-business owners would be subject to the tax, according to an analysis by the nonpartisan Joint Committee on Taxation.)
Even some of the president's supporters are calling for more aggressive steps to restrain healthcare spending and bring costs down.
"There are definitely a significant number of small businesses who are willing to pay into the system in order to get some form of reform," said John Arensmeyer, head of Small Business Majority, a left-leaning research and advocacy group.
"But there needs to be more work on containing costs."
Monday, December 28, 2009
Monday, October 19, 2009
Small Businesses Might Not Be the Key to Economic Recovery
Taken from BNet Intercom, by Stefan Deeran
“Small businesses vital to economic recovery go bankrupt” blares a new headlines from USA Today. Ok, so small businesses are going bankrupt. But why insert the “vital to economic recovery” assumption? It’s been constantly repeated as fact from pundits and politicians over the last few months that small businesses hold the key to the future. Even the Vatican has joined the choir, pushing for more credit for small businesses. Small businesses create 80 percent of all new jobs and drive “innovation in virtually every field,” according to a recent release from the US House Committee on Small Business.
But is all this actually true?
First of all, when many of us think of a “small business,” we think of our local bakery or bookstore. But according to the Small Business Administration, a “small business” in America has less than 500 employees. Now, where I come from, a 500 person company may not be the biggest business, but it sure isn’t a small one either. So many of the small business figures we keep hearing about may be based on a population set that isn’t quite valid.
Secondly, it makes sense to assume that we might see evidence of an economic rebound from smaller businesses first. If consumer spending inches up, restaurants may add a few more shifts before corporations start adding salaried positions to their payrolls. There may be plenty of indications of recovery from the small business sector. But the jury is still out as to whether small businesses actually cause economic growth.
Whether implicitly or explicitly stated, the “vital to economic recovery” argument really rests on the idea that entrepreneurs will save the day. We have all fallen for the romantic idea that today’s laid-off worker is really tomorrow’s Steve Jobs or Bill Gates, tinkering with the next billion dollar idea in their basements. Unfortunately, entrepreneurship may not be the economic silver bullet after all.
Here are a few of the reasons why, according to Scott Shane, a professor on entrepreneurship at
Case Western Reserve University:
To get more economic growth by having more start-ups, new companies would need to be more productive than existing companies. But they’re not.
Far from being job creators, as a whole, new firms have net job destruction after their first year.
On average, jobs in new firms pay less, offer fewer fringe benefits, and provide less job security than jobs in existing firms.
Shane concludes that the only small start-ups that actually create lasting, well-paying jobs and economic growth are the few hundred each year that receive substantial venture capital. In Shane’s view, government programs that encourage almost anyone to start a business are flawed because “they stimulate more people to start new companies disproportionately in competitive industries with lower barriers to entry and high rates of failure.”
“Small businesses vital to economic recovery go bankrupt” blares a new headlines from USA Today. Ok, so small businesses are going bankrupt. But why insert the “vital to economic recovery” assumption? It’s been constantly repeated as fact from pundits and politicians over the last few months that small businesses hold the key to the future. Even the Vatican has joined the choir, pushing for more credit for small businesses. Small businesses create 80 percent of all new jobs and drive “innovation in virtually every field,” according to a recent release from the US House Committee on Small Business.
But is all this actually true?
First of all, when many of us think of a “small business,” we think of our local bakery or bookstore. But according to the Small Business Administration, a “small business” in America has less than 500 employees. Now, where I come from, a 500 person company may not be the biggest business, but it sure isn’t a small one either. So many of the small business figures we keep hearing about may be based on a population set that isn’t quite valid.
Secondly, it makes sense to assume that we might see evidence of an economic rebound from smaller businesses first. If consumer spending inches up, restaurants may add a few more shifts before corporations start adding salaried positions to their payrolls. There may be plenty of indications of recovery from the small business sector. But the jury is still out as to whether small businesses actually cause economic growth.
Whether implicitly or explicitly stated, the “vital to economic recovery” argument really rests on the idea that entrepreneurs will save the day. We have all fallen for the romantic idea that today’s laid-off worker is really tomorrow’s Steve Jobs or Bill Gates, tinkering with the next billion dollar idea in their basements. Unfortunately, entrepreneurship may not be the economic silver bullet after all.
Here are a few of the reasons why, according to Scott Shane, a professor on entrepreneurship at
Case Western Reserve University:
To get more economic growth by having more start-ups, new companies would need to be more productive than existing companies. But they’re not.
Far from being job creators, as a whole, new firms have net job destruction after their first year.
On average, jobs in new firms pay less, offer fewer fringe benefits, and provide less job security than jobs in existing firms.
Shane concludes that the only small start-ups that actually create lasting, well-paying jobs and economic growth are the few hundred each year that receive substantial venture capital. In Shane’s view, government programs that encourage almost anyone to start a business are flawed because “they stimulate more people to start new companies disproportionately in competitive industries with lower barriers to entry and high rates of failure.”
Monday, August 24, 2009
The Death of Small Business?
This year has been nothing short of a vomit-inducing frenetic subcompact car ride for the consumer products industry. Twists, turns, potholes, collapsed bridges and government speed bumps have all posed an enormous challenge while trying to navigate the roads of small business in 2009. And as we head into summer's end of the year buyers forgot, it's hard to not ask if the tiny car has finally breached the guard rail and tumbled to its firey demise.
Or perhaps the wayward vehicle was overmatched by a larger, more unstoppable force than its pitiful meandering attempt at reaching recovery. That force inevitably being unemployment, looming inflation, and a host of other economic indicators that point more towards a wasteland than a destination.
Whatever the methods historians deem culpable for its demise, small business seems to have written it's own epithet in the shadows of the titans who have fallen before them. It is more of a summary of what could have been than a grand farewell, more of a footnote in the obituary section of the of the community newsletter. Small businesses have closed their doors, shut off their lights and left countless vacancies in malls, office parks and warehouses across the fruited plain with little or no recognition of the dashed aspirations, broken dreams and time lost on the individuals and families who had one glimmering yet fleeting opportunity.
While the causes of this tragedy are many, as with any mourning process, curious and angered parties will beg the question “where did this magnificent death spiral begin?” Was it the slumbering pilot named deregulation who nodded off at the wheel? Was it the Washington politicians with their interminable dangerous construction zones of waste and ignorance? Was it the greedy corporate executives and loan predators slamming their fat, money-filled armored vehicles into the unsuspecting small business Prius? What made small business die and why did it have to?
Our company has been slow to embrace any one particular event, group of individuals or course of action that bares the sole brunt or responsibility for the current economic condition and the toll it has taken on many small businesses and not just among our own clients. This is not some feeble cliché or attempt to placate all interested readers. We look at the current economic situation and what it means for our industry, but Beacon Consultants does not mourn, at least not yet.
Why? The short and perhaps surprising answer is that because small business is not dead. The markets and big box competition may have forced the tiny, battered vehicle over the steep ravine and into a ball of flame and smoke, but miraculously the driver, passengers and family dog, dazed and bruised have stumbled from the twisted, mangled, burning wreckage to a safe distance.
While this fantastic scene may be made for Hollywood, it is a vivid image of what we believe has and will continue to happen with our industry. Because small business is not about what kind of vehicle you drive, but who is driving it. The entrepreneurial spirit can never be broken. The vehicle make and model and the roads it travels on along with the weather may change. Yes, even the biggest and strongest of motorized transportation can be destroyed. But the one who charts the course, the people who steer the vessel and are responsible for making its destination, they too have a destiny.
Beacon Consultants does not believe in business, we do not believe in markets or government or money. We believe in people charting their course, making their own dreams and watching them come true. While markets, governments, businesses and money will wax and wane with the passage of time, we cannot accept the death of small business as inevitable.
We only accept the changes that death and life bring.
Or perhaps the wayward vehicle was overmatched by a larger, more unstoppable force than its pitiful meandering attempt at reaching recovery. That force inevitably being unemployment, looming inflation, and a host of other economic indicators that point more towards a wasteland than a destination.
Whatever the methods historians deem culpable for its demise, small business seems to have written it's own epithet in the shadows of the titans who have fallen before them. It is more of a summary of what could have been than a grand farewell, more of a footnote in the obituary section of the of the community newsletter. Small businesses have closed their doors, shut off their lights and left countless vacancies in malls, office parks and warehouses across the fruited plain with little or no recognition of the dashed aspirations, broken dreams and time lost on the individuals and families who had one glimmering yet fleeting opportunity.
While the causes of this tragedy are many, as with any mourning process, curious and angered parties will beg the question “where did this magnificent death spiral begin?” Was it the slumbering pilot named deregulation who nodded off at the wheel? Was it the Washington politicians with their interminable dangerous construction zones of waste and ignorance? Was it the greedy corporate executives and loan predators slamming their fat, money-filled armored vehicles into the unsuspecting small business Prius? What made small business die and why did it have to?
Our company has been slow to embrace any one particular event, group of individuals or course of action that bares the sole brunt or responsibility for the current economic condition and the toll it has taken on many small businesses and not just among our own clients. This is not some feeble cliché or attempt to placate all interested readers. We look at the current economic situation and what it means for our industry, but Beacon Consultants does not mourn, at least not yet.
Why? The short and perhaps surprising answer is that because small business is not dead. The markets and big box competition may have forced the tiny, battered vehicle over the steep ravine and into a ball of flame and smoke, but miraculously the driver, passengers and family dog, dazed and bruised have stumbled from the twisted, mangled, burning wreckage to a safe distance.
While this fantastic scene may be made for Hollywood, it is a vivid image of what we believe has and will continue to happen with our industry. Because small business is not about what kind of vehicle you drive, but who is driving it. The entrepreneurial spirit can never be broken. The vehicle make and model and the roads it travels on along with the weather may change. Yes, even the biggest and strongest of motorized transportation can be destroyed. But the one who charts the course, the people who steer the vessel and are responsible for making its destination, they too have a destiny.
Beacon Consultants does not believe in business, we do not believe in markets or government or money. We believe in people charting their course, making their own dreams and watching them come true. While markets, governments, businesses and money will wax and wane with the passage of time, we cannot accept the death of small business as inevitable.
We only accept the changes that death and life bring.
Monday, August 3, 2009
Consumer Rebound?
Stocks are up over 4% for the year.
And that's all. Big deal, right? In this age of lightning fast digital communications we are often very quick to embrace the figure du jour and assign a tremendous amount of value to it. Unemployment is at recent record highs, consumer confidence is way down, there is still work left to do before a consumer products market rebound takes shape.
So what indicator do you feel is the best for sensing when this rebound will take place? And when will this happen? How do you see it playing out? Beacon Consultants, while having several ideas, takes no real official stance as to how and when this will all play out, but is very willing and ready to hear all of your comments. So have at it. We all need to stick together.
And that's all. Big deal, right? In this age of lightning fast digital communications we are often very quick to embrace the figure du jour and assign a tremendous amount of value to it. Unemployment is at recent record highs, consumer confidence is way down, there is still work left to do before a consumer products market rebound takes shape.
So what indicator do you feel is the best for sensing when this rebound will take place? And when will this happen? How do you see it playing out? Beacon Consultants, while having several ideas, takes no real official stance as to how and when this will all play out, but is very willing and ready to hear all of your comments. So have at it. We all need to stick together.
Friday, July 17, 2009
Recovery comes to those who wait
Note: This entry was written in December, 2008 with my hope that I would never have to post it. Now eight months later, as things have progressively become worse economically, I find that it rings truer than ever.
The great American patriot wrote: These are times that try men's souls. I'm not sure that a more parallel time exists in the retail environment than right now to utter that phrase once again. The question becomes one of practicality and philosophy. When investment banks fail, when mortgage giants go belly up it makes the average retailer wonder if they will be the next casualty in this unprecedented economic environment.
In fact with many individuals afraid of losing their savings, their homes and their insurance it leaves one to wonder whether the retail game is even worth the trouble. Big box stores like Target and Wal Mart draw customers to greater selection and lower prices in an era when every dollar that does not go towards fueling up a vehicle needs to be carefully watched and counted.
All this does not leave much room for what used to be called disposable income. So what does that mean for you and your business? The news, no matter where you turn, is not good.
Unlike our big money brothers in the financial sector you can't ask the government for this month's rent or dip into your taxes to buy new product or remodel your existing floorspace. No, in the current environment, you as a retailer are on your own.
I don't bring this to your attention to get you down in the dumps or to try to bring some sort of doomsday scenario to your business. Chances are you have probably realized most of these dire ideas already. The question now that we have all seen in the newspapers, magazines, on television simply is: now what?
First of all, as the old saying goes, this is no time to panic. It is however the perfect time to take stock in your own financial future and that means figuring how your business, your career and your lifestyle are affecting how you live each day. When it comes to your business the last thing that anyone now wants to admit is that it is time to throw in the towel. But weighing the cost of keeping your current career and business can be a tricky task. You must be ready to weather a storm that is going to last longer and be much more intense than many would have imagined. While business owners and salespeople collectively want to feel that change for the better is just around the corner all the usual signs point to a roller coaster ride that looks for the most part to be headed downward for the foreseeable future. Here are just a few of the things that you can be doing as a retailer or a salesperson to stem the tide of financial meltdown:
For salespeople:
1. Use the sure money-making product lines. No question about it, at this stage of the game you need to be concentrating your efforts on the product categories in your lineup that sell well and sell quickly. While sales managers may be breathing down your neck about their specific products and why more is not being done to sell specific lines, the added pressure should serve as a reminder that product that sells well will typically warrant little additional top-down pressure. Drop product lines that are selling poorly.
2. Remind yourself why you are a part of this game in the first place. Most independent sales representatives are doing what they do for a variety of reasons, but try to focus on one or two of the big reasons. For some it's the prospect of limitless income (although lately I'm sure this doesn't seem to be the case). But the potential for limitless income is at least always a possibility. For others the notion of being able to set your own hours and travel on specific dates is a major factor on your decision to continue this career.
3. Decide if you can live at your current sales pace or less for at least the next nine months. If the answer to this seems dire it may be time to consider another career path or at least take on a second, steadier-paying job. Too many salespeople assume that the good times will be around for a long period of time. A big rule in sales that often gets overlooked: it takes at least a year to develop a customer base and another year to develop a security net for when sales begin to inevitably drop off. Anyone who got into their first sales position because of the lure of easy, steady money from day one typically finds himself in deep trouble early on.
Next Entry: For Retailers
The great American patriot wrote: These are times that try men's souls. I'm not sure that a more parallel time exists in the retail environment than right now to utter that phrase once again. The question becomes one of practicality and philosophy. When investment banks fail, when mortgage giants go belly up it makes the average retailer wonder if they will be the next casualty in this unprecedented economic environment.
In fact with many individuals afraid of losing their savings, their homes and their insurance it leaves one to wonder whether the retail game is even worth the trouble. Big box stores like Target and Wal Mart draw customers to greater selection and lower prices in an era when every dollar that does not go towards fueling up a vehicle needs to be carefully watched and counted.
All this does not leave much room for what used to be called disposable income. So what does that mean for you and your business? The news, no matter where you turn, is not good.
Unlike our big money brothers in the financial sector you can't ask the government for this month's rent or dip into your taxes to buy new product or remodel your existing floorspace. No, in the current environment, you as a retailer are on your own.
I don't bring this to your attention to get you down in the dumps or to try to bring some sort of doomsday scenario to your business. Chances are you have probably realized most of these dire ideas already. The question now that we have all seen in the newspapers, magazines, on television simply is: now what?
First of all, as the old saying goes, this is no time to panic. It is however the perfect time to take stock in your own financial future and that means figuring how your business, your career and your lifestyle are affecting how you live each day. When it comes to your business the last thing that anyone now wants to admit is that it is time to throw in the towel. But weighing the cost of keeping your current career and business can be a tricky task. You must be ready to weather a storm that is going to last longer and be much more intense than many would have imagined. While business owners and salespeople collectively want to feel that change for the better is just around the corner all the usual signs point to a roller coaster ride that looks for the most part to be headed downward for the foreseeable future. Here are just a few of the things that you can be doing as a retailer or a salesperson to stem the tide of financial meltdown:
For salespeople:
1. Use the sure money-making product lines. No question about it, at this stage of the game you need to be concentrating your efforts on the product categories in your lineup that sell well and sell quickly. While sales managers may be breathing down your neck about their specific products and why more is not being done to sell specific lines, the added pressure should serve as a reminder that product that sells well will typically warrant little additional top-down pressure. Drop product lines that are selling poorly.
2. Remind yourself why you are a part of this game in the first place. Most independent sales representatives are doing what they do for a variety of reasons, but try to focus on one or two of the big reasons. For some it's the prospect of limitless income (although lately I'm sure this doesn't seem to be the case). But the potential for limitless income is at least always a possibility. For others the notion of being able to set your own hours and travel on specific dates is a major factor on your decision to continue this career.
3. Decide if you can live at your current sales pace or less for at least the next nine months. If the answer to this seems dire it may be time to consider another career path or at least take on a second, steadier-paying job. Too many salespeople assume that the good times will be around for a long period of time. A big rule in sales that often gets overlooked: it takes at least a year to develop a customer base and another year to develop a security net for when sales begin to inevitably drop off. Anyone who got into their first sales position because of the lure of easy, steady money from day one typically finds himself in deep trouble early on.
Next Entry: For Retailers
Thursday, April 23, 2009
What's so bad about lower prices?
Ordinary deflation cycles typically work like this: Productivity increases resulting in surplus in inventory. As competition for that inventory climbs, prices fall. As prices fall, lower profit margins rev up the engine of ingenuity allowing for better products and better market response.
This is not an ordinary deflation cycle. In fact, most signs currently point to a sense of INflation as economic recovery gradually takes over. But whatever the future holds, for the moment, prices on everyday items like milk and gas all the way up the ladder to luxury items like boats and mansions are not quite sure what to do. You can practically name your price for today's SUVs while oil prices show no sign of coming back down nor spiking again any time soon.
We do all remember $4/ gallon gasoline. And while the price of crude oil has stabilized for now, no one is sure what to do about cars. Same thing applies with the consumer products industry, while the prices in stores may seem like they have stabilized at a rather uncomfortable profit margin for the retailer, few takers are out there yet for the products, thus the inventory level does not fall and profit margins stay low thereby not producing income and keeping more and more people away from the engine of ingenuity.
For us in the consumer discretionary market, it is a rough time to say the least. No one really needs what you have in your shop or warehouse, and in this economy they can't want it badly enough to buy it when things like jobs are hard to come by. So for the buyer this should be a great time, but alas, we are all sharing in the pain.
This is not an ordinary deflation cycle. In fact, most signs currently point to a sense of INflation as economic recovery gradually takes over. But whatever the future holds, for the moment, prices on everyday items like milk and gas all the way up the ladder to luxury items like boats and mansions are not quite sure what to do. You can practically name your price for today's SUVs while oil prices show no sign of coming back down nor spiking again any time soon.
We do all remember $4/ gallon gasoline. And while the price of crude oil has stabilized for now, no one is sure what to do about cars. Same thing applies with the consumer products industry, while the prices in stores may seem like they have stabilized at a rather uncomfortable profit margin for the retailer, few takers are out there yet for the products, thus the inventory level does not fall and profit margins stay low thereby not producing income and keeping more and more people away from the engine of ingenuity.
For us in the consumer discretionary market, it is a rough time to say the least. No one really needs what you have in your shop or warehouse, and in this economy they can't want it badly enough to buy it when things like jobs are hard to come by. So for the buyer this should be a great time, but alas, we are all sharing in the pain.
Thursday, March 12, 2009
What Lower Prices Mean For Everyone
Sounds good doesn't it? Where else and at what time have we ever seen a situation like this? Lower prices, the holy Grail for every American consumer. People look for them, long for them, shop for them and surf the web for them. And here we are in the midst of an economic crisis and prices on some products has never been lower. Everything from computers to cars to houses to LCD televisions are going out the door at rock bottom prices.
Economics has a strange sense of humor doesn't she?
Prices are often at their lowest when too much inventory exists. Too much inventory exists often when people do not have enough money to spend. This leaves your vendors with little money, your customers with little money and ultimately your business and yourself with less money.
So as the economy has forced prices downward, is this a good thing for consumers or a bad thing for your business?
The question itself has some inherent flaws. The retail/consumer, wholesale/retail and the salesman/vendor relationship are all supposed to be symbiotic. What benefits one should benefit the other and so on and so forth down and up the chain. But in these crazy times nothing seems to be benefiting anyone on any level.
Lower prices mean lower margins, lower margins mean lower overhead costs, lower overhead costs mean less jobs, less jobs means less dollars and as stated previously, less dollars means more inventory and more inventory means lower prices.It's a vicious cycle with no clear end in sight. And we just seem to keep going in a spiral that leads down. While no one can see the bottom, the bottom line is, lower prices, for reason of too few dollars is bad.
Next Post: What's so bad about lower prices?
Economics has a strange sense of humor doesn't she?
Prices are often at their lowest when too much inventory exists. Too much inventory exists often when people do not have enough money to spend. This leaves your vendors with little money, your customers with little money and ultimately your business and yourself with less money.
So as the economy has forced prices downward, is this a good thing for consumers or a bad thing for your business?
The question itself has some inherent flaws. The retail/consumer, wholesale/retail and the salesman/vendor relationship are all supposed to be symbiotic. What benefits one should benefit the other and so on and so forth down and up the chain. But in these crazy times nothing seems to be benefiting anyone on any level.
Lower prices mean lower margins, lower margins mean lower overhead costs, lower overhead costs mean less jobs, less jobs means less dollars and as stated previously, less dollars means more inventory and more inventory means lower prices.It's a vicious cycle with no clear end in sight. And we just seem to keep going in a spiral that leads down. While no one can see the bottom, the bottom line is, lower prices, for reason of too few dollars is bad.
Next Post: What's so bad about lower prices?
Monday, February 23, 2009
A Brave New World for a Challenging Time
We've taken the opportunity to introduce Beacon Imports on our blog. Right here and right now- No major web marketing push, no mass emails, no PR blitz. We leave these types of things to our staff who help our clients day in and day out. As for us, we've decided to step onto the international scene not by competing with our clients, but by complementing their selection and facilitating the important steps in going overseas to do business without ever leaving your office.
The Internet has made the costs and options of doing business overseas incredibly easy and incredibly challenging. While the barriers of accounting, product selection, logistics and marketing have all been removed by an omnipresent digital medium, the barriers of trust and goodwill have been fortified by a global economy that thrives on balance sheets and incoming transactions, an economy of dollar figures, credit card numbers and bank accounts. He who has the most incoming cash by any means necessary.....wins. And lost in this sea of light speed cyber business is the notion that somebody, a physical, real, emotional, flesh and blood human being cares about your business, your bottom line and your future.
That is where the digital divide leaves off and where Beacon Imports begins. The global marketplace can be a confusing, difficult and often times hectic place to do business. But with a few key elements in place, a few tips about how to spot good and bad suppliers, a great business plan both domestically and foreign, you can cash in on goods and services that can make your business much more profitable.
Beacon Imports (much like our core business model in Beacon Consultants) does not seek to take a commission on your sales of imported goods. We do not seek to find tricky ways to make a quick dollar off a transaction- in fact, it is these very types of businesses that we try to shield you from. Beacon Imports seeks to give you truly global advice on how to find, buy, move and sell goods that stand out from your competitors. And as always, when you have your routine down, when your profit is being made, we gracefully step aside and let you continue to make money only seeking our help when you need it.
In essence, Beacon Imports takes the leap across the oceans to help you understand the brave new world that awaits your business. We invite you to call or email us to find out how we can help you.
The Internet has made the costs and options of doing business overseas incredibly easy and incredibly challenging. While the barriers of accounting, product selection, logistics and marketing have all been removed by an omnipresent digital medium, the barriers of trust and goodwill have been fortified by a global economy that thrives on balance sheets and incoming transactions, an economy of dollar figures, credit card numbers and bank accounts. He who has the most incoming cash by any means necessary.....wins. And lost in this sea of light speed cyber business is the notion that somebody, a physical, real, emotional, flesh and blood human being cares about your business, your bottom line and your future.
That is where the digital divide leaves off and where Beacon Imports begins. The global marketplace can be a confusing, difficult and often times hectic place to do business. But with a few key elements in place, a few tips about how to spot good and bad suppliers, a great business plan both domestically and foreign, you can cash in on goods and services that can make your business much more profitable.
Beacon Imports (much like our core business model in Beacon Consultants) does not seek to take a commission on your sales of imported goods. We do not seek to find tricky ways to make a quick dollar off a transaction- in fact, it is these very types of businesses that we try to shield you from. Beacon Imports seeks to give you truly global advice on how to find, buy, move and sell goods that stand out from your competitors. And as always, when you have your routine down, when your profit is being made, we gracefully step aside and let you continue to make money only seeking our help when you need it.
In essence, Beacon Imports takes the leap across the oceans to help you understand the brave new world that awaits your business. We invite you to call or email us to find out how we can help you.
Wednesday, February 11, 2009
Down, But Not Out
During the darkest days of the American revolution, Thomas Paine wrote, "These are times that try men's souls." Economically speaking, I don't think those words could ring any truer for the retail and wholesale community. And while these trying times may seem destined for your demise and the demise of many, many players on the consumer products stage, I submit to you that the final curtain has yet to fall.
It's time to take stock in what your customers need, not what your customers want. I know, I know, this seems to be a paradox that has no real solution. How can an industry that thrives on consumers' wants possibly cater to their needs as well? After all, a company that sells gifts, accents and home decor cannot become a bread, milk and butter distributor overnight, right?
The simple answer to this is no. But the more complex answer to this is.....maybe. It depends on your long term outlook and just how willing you are to take risks and change in this environment.
NEXT: What do lower prices mean for everyone?
It's time to take stock in what your customers need, not what your customers want. I know, I know, this seems to be a paradox that has no real solution. How can an industry that thrives on consumers' wants possibly cater to their needs as well? After all, a company that sells gifts, accents and home decor cannot become a bread, milk and butter distributor overnight, right?
The simple answer to this is no. But the more complex answer to this is.....maybe. It depends on your long term outlook and just how willing you are to take risks and change in this environment.
NEXT: What do lower prices mean for everyone?
Tuesday, January 27, 2009
New Year, New You, New Structure
The economic turmoil has placed great stress on our industry. Who will survive and how will our businesses look when this is all over? In our latest series of posts, we will be showing you how many companies have restructured for better or for worse to adapt to the changing and challenging times. Please continue to check back daily and remember to leave your comments, we are all in this together and we will get through it together.
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