I Love Capitalism

gatlinburgI don’t want to go off on a political rant but I love capitalism. With the debate about government take-overs of this and that and whether we’re rushing headlong into a socialist state, I can’t help but worry that capitalism is in danger.

My wife and I just came back from a short vacation.  We attended a wedding in Atlanta and visited our son and daughter-in-law in Huntsville, AL.  In between, we spent a few days in the Great Smokey Mountains. If you want to see capitalism and entrepreneurship at their best I recommend a visit to the Smokeys, particularly to the town of Gatlinburg where small, local business reigns supreme.

There are some national chains in this small Tennessee town but the majority of businesses are of the locally-owned variety, including motels, restaurants, gift shops, mini golf, and other tourist-related businesses.  Just a few miles outside town is an arts and crafts community made up exclusively of independent business men and women who enjoy the life style of producing their own products and selling them directly to the consumer.

There is no question that this has been a tough summer for most businesses, particularly in the tourist related industries, but the independent business people in the Gatlinburg area seem to be holding their own and some are doing quite nicely.

The thing is that while I was supposed to be on vacation, I couldn’t help but look at so many small businesses and appreciate the value of capitalism.  It’s what’s made our country great.  People who are willing to invest their own time and money in a business, knowing that they might succeed or fail demonstrate the same  pioneer spirit that brought people to this country in the first place.  It’s what made them move away from the east coast and eventually go all the way to the Pacific ocean.  You and I can’t let that spirit be crushed by self-serving politicians or by the big box chains.

Not only do we have to support organizations like the 3/50 project , our local chambers of commerce, and other local business organizations, we have to get involved in other things as well.  When small-business-damaging laws are being considered at the national and local level, we have to speak out.

Being an entrepreneur is a noble profession.  Profit is not a four letter word. We should be proud of our role as the engine of commerce in this country.  We should offer our customers the best service we possibly can and not be afraid to ask them for a fair price.

In the next few days I’ll be introducing you to a couple of people I met on the trip whose stories I hope you find as interesting as I did.

A City That Gets It.

This post first appeared on September 7, 2007.  Since I’m sitting here in Huntsville once again, it seemed like a good time for a rerun.  I hope you enjoy it.  FYI, the Marriott Courtyard in Huntsville does offer free wifi.

Huntsville, AL

Huntsville_wifi
I’m posting this from the Big Spring Park in Huntsville, AL, where they actually offer free wireless internet service.  Wi-Fi at our hotel costs $10 per day, but you can sit in the park, enjoy the beautiful weather, AND check your email for free.

As we’ve been discussing, the Internet is everywhere, but wi-fi in the park is a great idea.  Instead of being tethered to an ethernet cable or a phone line, in a hotel room with too little work space and not enough light, in Huntsville you can enjoy the fresh air and the scenery while you check your email.

Jogging in the park isn’t my cup of tea (or glass of sweet tea here in the South) but blogging in the park is something I could get use to.

I imagine the presence of NASA in Huntsville, and the high tech industry that supports the space program might have something to do with having the Internet in the park, but I predict that the day isn’t far off when every city will have it.

Meanwhile, your intrepid blogger will continue working hard for you, even on vacation.

Blogging_in_the_park

Are There Limits to Buying Locally?

This rather lengthy post originally appeared on February 24, 2009

A regular reader and former coworker emailed me over the weekend with an interesting question about buying locally.  He asked, “At what point is price an issue?” He cited a couple of recent instances where he paid more to buy something locally rather than buying it online.  The price difference wasn’t enough to be a problem, but is there a point where price trumps doing business with a neighbor? It’s not unlike the question, “Can you be a little bit pregnant?”

The question raises still more questions!

Aren’t some mail order businesses run by independent business people? In the past I have written good things about Heather Gorringe and her “Wiggly Wigglers” online gardening business. (A Small Business Owner Who Knows How to Use Social Media. A Big Award for Wiggly Wigglers) You can’t lump her into the same category as Amazon.com.  I’d buy from Wigglers if I were into gardening (and if she weren’t in England, making shipping very expensive.)  It’s a global mom-and-pop operation, something that would have been impossible just a few years ago.

What does “local” mean? Here in Saint Louis, at least until last year, Anheuser-Busch was a local business.  Was I supporting local business by buying Budweiser?  Yes I was.  But what about local micro-breweries?  Wouldn’t drinking a beer from Schlafley (a local micro) be more in line with a Buy Local philosophy?  And what about Guinness which is unique and only brewed in Ireland?

Then there’s the issue of determining what’s local and what’s not.  McDonald’s is a national chain, but the individual stores are locally owned. Then again, all of their raw materials come from McDonald corporate.   On the other hand, there are some similar operations, like White Castle, where the company owns all the stores.  How many people know that?  How do you know which is which?  Given the addictive taste of a White Castle burger, and their low cost, does it really matter if I eat there?  Like Mickey D’s, they bring the stuff in from out of town.

Does buy local trump buy American? Chances are that you’ll be more likely to find American-made items at your local hardware store rather than at Lowes or Home Depot.  But, what if you don’t?  What if the chain has an American-made drill and everything at the local True Value is made in China?  Which is the better choice?

What about unique items? Again, the local merchant is more likely to have the really unique items, but not always.  Books are a good example.  Sometimes the only place to find an off-beat book is at Amazon.com.  Let’s say that the local book store (if you can find one) doesn’t have the book, but can order it for you.  It will cost $50.00 and take two weeks.  Amazon can get you the same book in two days and it will cost you $40.00 (including shipping and handling).  And you need the book for an important project that’s due in a week.

This one is pretty easy.  You have to go with Amazon because of the deadline.  But what if there is no deadline.  What if you just want to read the book?  Is it worth ten more dollars and twelve more days to support the local business?  Nobody said this was going to be easy.

Buying locally takes some effort.  But it’s worth it.  You wouldn’t be reading this if you didn’t have a vested interest.  If you want your friends and neighbors to do with business with you, you have to do business with them.  It’s as simple as that.  That’s the short-term answer.

Long term, if you want to have a neighborhood hardware store to answer your questions, and to have the part for your twenty-year-old lawn mower in stock, then you’d better do your part in keeping them around.

A lot is being written and said about economic stimulus.  I’m not an economist, but I do think that stimulating the national, and even the world, economy starts with stimulating the local economy.  We all know that small business is responsible for the lion’s share of jobs in the United States.  A sign of a healthy economy is a lot of “help wanted” signs in the windows of our local stores and restaurants.  We can make that happen.

I just realized that I’ve written quite a bit, 698 words and counting, and haven’t answered the question, “At what point is price an issue?” First, I think you have to look at value rather than price.  And value includes the services and potential services that the local business offers.  What looks like a better price may not be.  In the case of on-line purchases, have you considered shipping and handling?  What about the hassle of receiving the merchandise (for example, taking off work to be home when the package is delivered) and the possible hassle of returning something that isn’t right?  Can you trust the vendor to deliver the product as ordered?  All of these come at a price.

If you’re comparing a local store versus a chain, are you comparing apples to apples.  The big guys often have products that are built to their spec, which may not be your spec.  An items that’s ten percent cheaper but wears out twice as fast as a similar one isn’t much of a bargain, is it?

If an item requires assembly or technical knowledge to operate, who’s going to help you out if you have problems, the “helpful hardware man” or the guy in the blue smock who just started to work yesterday?

To wrap this up, you have to make up your own mind what you value and what you don’t.  Everything has a price.  You get what you pay for.  (Insert your own cliche here.)

As a business person you might want to do unto others as you would have them do unto you.  But what about your customers?  How do we get them on the “buy local” bandwagon?  It’s all about education.  Show them why your product is worth more than your big box or out-of-town competitors.  Use in-store signage, advertising, your web site, and your presence on social media (you are on social media, aren’t you?) to tell them why it’s in their best interest to buy from you.  Because, when all is said and done, people do what’s in their best interest, not yours.

I’d especially welcome comments on this important topic.

Ask for the Sale!

This post originally appered on January 14, 2009.

In yesterday’s post, I suggested that you find a reason for your customers and potential customers to find your business indispensible in this weak economy.  I hope you’re taking that advice seriously.

Here’s another suggestion:  Ask every customer for the sale.  Today at the Retail Contrarian blog, my friend Doug Fleener suggests six ways to conquer the “I’m only buying what’s on sale” mentality.  His sixth and final point is so simple that you wouldn’t think it necessary to repeat it, but I guess we all have to be reminded once-in-a-while to get back to the basics.  He says,

Give the customer an opportunity to make the purchase. It’s as simple as asking the customer to buy it. The more bad economic news there is, the less likely your competitors will ask for the sale. Do you?”

He’s absolutely right, when times are tough it’s easy to get discouraged and fall  into a mindset that the customer isn’t going to buy.  To succeed in this market, don’t let it happen.  You and your staff should ask every customer who walks into the store to buy something.  You’ll be surprised at the results.

Bad Times Can Be Good Times

This post originally appeared on January 12, 2009

My wife is a HUGE fan of Home and Garden Television(HGTV).  She can sit for hours watching shows about decorating, and color, and buying a house in the Carribean (?).  She has no need for the remote if the TV’s set on her favorite channel.  She’s even  gotten me interested in some of the shows (especially the Carribean one).

A lot of the shows are about buying and selling a house.  Watching with Jan I’ve learned a new word, “staging”.    According to Haverhill Home Staging:

“Home staging is the design process of de-personalizing a private residence prior to putting it up for sale in the real estate marketplace. This is often achieved by re-arranging, de-cluttering and improving on certain items.”

In other words, in order to sell your home, you have to make it look like you don’t live there.  You do this by taking down pictures and other items that relate to you and your family.  You want the buyer to look at your house and see it as their house.  You want to get rid of your old junk, which is a good idea anyway if you’re planning to move.

Haverhill also has an educational division where they can teach you to be a stager with the possibility of working for them, or going out on your own.

All this is a long way to go to get to something that caught my attention on the Haverhill web site, in the FAQ section. The question is, “Do poor market conditons affect the demand for Home Staging?”

And the answer? “Yes. The slower the market, the more help home sellers need to compete with the increased number of homes for sale. There is less demand for Home Staging in a seller’s market.”

Remember, this is a company that makes its living spinning things in a positive way to make a sale.  Understanding that, this answer isn’t just brilliant, it’s something we should all use in our own businesses.

What is it about your business that makes it more necessary in a down economy?  C’mon, there’s something about your industry, your market, your personal brand, that makes it important to your customers today.  If you don’t know, then spend some time thinking about it.  Brainstorm with your staff, your spouse, your mastermind group until you come up with an answer, then promote the heck out of it.

If a company that provides a service to home sellers when no one is buying homes can turn the market into a positive, then there’s no reason why you can’t too.

Let us know what you come up with.

Small Business Negotiation

I may not be able to post new material for the next few days so I will be running some “best of” posts.  I hope you enjoy this stroll down memory lane.  This post originally appeared on January 20, 2009

It’s days like today that I appreciate being an independent blogger rather than a corporate employee.  I doubt that I would have covered this topic in my past position.  As it is, I may step on a few toes with this post, but I’m not worried about that.  My job is to help you.

In an article at the Wall Street Journal online, Raymond Flandez points out that in the current economy almost anything is negotiable.  In a recent survey, 15% of small business owners and managers said that they had recently renegotiated long-range fixed-cost supply contracts.

As Flandez points out, money talks.  If you have traditionally paid on time you stand a better chance of cutting a better deal. Vendors have inventory and they need cash, making it a buyers’ market for companies with good payment history and cash flow.

Here’s where I may rub some people the wrong way.  Now is the time to ask your vendors for concessions. They need sales to pay their own bills, especially fixed-costs like rent.  They also have payroll to meet.  If you can help them turn inventory into cash, you’re in the drivers’ seat.

The Journal piece offers some case studies of companies who got very creative in their negotiations with key suppliers, including Atlanta Refrigeration Company who got their supplier, Heritage Food Service Equipment, to actually hire four Atlanta Refrigeration employees in exchange for an exclusive supplier agreement.

The key thing to remember here is that every negotiation should end in a win/win situation.  Atlanta Referigeration saved four employees jobs while Heritage Food got additional business right away and the promise of much more when the economy improves.

The days of “us vs. them” negotiations are over.  But, if you can put together a package that reduces your costs and offers an advantage to your suppliers, you stand a good chance of saving a lot of money, if the suppliers can count on you to pay your bills.  If your current suppliers balk, then maybe it’s time to shop around.

Escape from Cubicle Nation

http://www.escapefromcubiclenation.com/

For a long time I’ve been a fan of Pamela Slim and her blog, Escape From Cubicle Nation.  The topic, as the name implies, is breaking free from the corporate world and starting your own business.  While Mining the Store is primarily aimed at those of you who have already made that move, there’s still a lot to be learned from Pamela’s blog. As a fellow entrepreneur, her posts are always interesting and well worth the time.

Pamela recently released a new book called, surprisingly enough, Escape From Cubicle Nation.  I haven’t read the book myself but my friend Krishna De has done an interview with Pamela on her Biz Growth Live  podcast.

You can download a free chapter of the book at the Escape web site.  Check it out!