Teen Ethics

Regular readers know that MYOB deals with a lot of serious issues, but we always try to keep things on the light side.  After all, there’s enough negativity coming at you every day from radio, TV, and your local news.

But here’s something that’s very unpleasant.  In fact it’s downright scaryJunior Achievement and Deloitte recently released the results of a survey on teenage ethics.  Considering that today’s teens are tomorrow’s (maybe even today’s) employees, their values are very important to the future of our businesses. 

Here are a few of the survey’s conclusions:

  • Seventy-one (71) percent of teens feel prepared to make ethical decisions when they enter the workforce, but thirty-eight (38) percent of that group believe that it’s sometimes necessary to "cheat, plagiarize, lie, or even behave violently in order to succeed."
  • Nearly one fourth of teens think it’s ok to cheat on a test under certain circumstances.
  • Twenty-three (23) percent think violence toward another person is acceptable.
  • More than half of the teens surveyed either thought it is unfair, or weren’t sure if it’s unfair for an employer to fire or suspend someone for unethical behavior committed outside of the job.
  • More than half believe it isn’t fair for an employer to make hiring and firing decisions based on the employee’s online activity.  Another nineteen (19) percent weren’t sure.
  • Almost half believe that it’s ok to download music without paying for it but only five (5) percent think it’s ok to steal something from a store.

Clearly the level of ethics and morality in our society are on the decline.  But these hard numbers reflecting the views of our young people are alarming.  Clearly we all have to be very careful in making personnel decisions.  If nearly one out of four potential employees think physical violence is an acceptable way to handle problems, there is a very real liability issue for every employer.  If employees act in an unethical manner it can destroy a business’ reputation.

Of course everything isn’t doom and gloom.  If one in four potential employees thinks violence is the way to resolve conflict then three out of four don’t.  It just means that we have to be very careful to hire the right people.  Background and reference checks, including Googling the applicant, are more important than ever.  A check of MySpace, FaceBook, and other online sites is also important and completely legal and ethical, even if half your applicants think it’s unfair.

Junior Achievement sponsors programs that teach business ethics including a free online program for students in grades 4-12.  In-person programs are usually delivered by volunteers from the business community.  There are even college scholarships available for students who complete the ethics course.  There is more information on the JA web site, including a "Get Involved" link.

Thanks to Workforce Management Quick Takes for pointing MYOB to the survey.

[Update:  02:09 PM 4/15/08  As a follow up to Bill Hinderer’s comment below, here’s a link to Take Our Daughters and Sons to Work Day.

Your Strategic Plan

This is the eighteenth, and final,  (hold your applause) installment in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation. 

Over the course of this series we’ve looked at the eight trends and six challenges facing retailers according to Stanyon.  This time we’re looking at challenge #6, the limitation of management skills and capabilities. 

Stanyon isn’t implying, and I’m not either, that independent retailers lack management skill.  What he is saying is that the increasing pace of change (challenge #3) is making it hard for all of us to keep up.  He writes, "The increasing complexity of business and the speed of change place an increasing premium on financial knowledge, strategic planning, and leadership.  This is a critical area of focus for small independents because there is no longer the kind of margin for error that might have existed in the past."

You wear a lot of different hats every day.  You’re very busy.  Running a business is a full-time job, and then some.  There just don’t seem to be enough hours in the day.  Quoting Stanyon again, "Stepping back from the day-to-day operations to look at the business strategically is a common problem for small independents." 

You’re the CEO of your business.  Your most important job is making the big decisions that drive the dollars to the bottom line.  That, along with meeting and interacting with your customers and staff, is the most important thing you can do every day.  It makes perfect sense to hire someone, either internally or externally to do the routine tasks that really aren’t worth your time.

But, be careful!  Hiring an accountant, for example, doesn’t relieve you of the responsibility of overseeing the work.  An accountant may know numbers, but he doesn’t necessarily understand your business.  That’s your job.

None of us knows everything.  Every day there seems to be more to know and less time to learn.  You need a strategic plan and you need to delegate the less-important things so you can focus on that plan.  A good plan should include learning goals for you and everyone in your organization. 

There are excellent resources available to the independent retailer to help develop a strategic plan.  It shouldn’t be complicated and it shouldn’t be expensive.  Check out some of the "Useful Links" on the left, or do a Google search for "strategic planning". 

As we mentioned in an earlier post, the Small Business Administration offers on-line courses on planning on their web site. If you need help, contact your local small business development center.  The Association of Small Business Development Centers website will direct you to your local SBDC.

The beginning of the new year is an excellent time to put a new strategic plan into effect.  Updated at least every year, it should help you focus your time and energy in the areas where you’re most effective, and that’s a win/win for everyone.




The Educated Consumer

This is number seventeen  (we’re almost done) in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at Stanyon’s fifth Challenge (opportunity), "transparency of price and product information."

Price transparency and the proliferation of product
information are two sides of the same coin. Today’s consumers have more knowledge than ever before. This can be a good thing or a bad thing,
depending on how you handle it.

The days of hiding behind “manufacturer’s list price” are
pretty much over. With just a few mouse
clicks, any consumer can find out what a product is actually selling for, not
just across town, but across the country. Armed with this knowledge, she’s is in a much better bargaining position
than she was just a few years ago. Even
if a manufacturer doesn’t allow sales on the web, there are a variety of chat
rooms, blogs, forums, and other internet sites where consumers can discuss
price among themselves.

While all of this pricing information might tend to drive
retail prices (and profit margins) down, the availability of lots of product
information should have the opposite effect. The same customer who has taken the time to research price most likely
has researched product specs as well. Information on manufacturers’ web sites and on product comparison sites,
along with discussions on those social sites mentioned above, make today’s
customer very knowledgeable about features and benefits. A favorable product mention on a popular blog,
or in a chat room, will drive customers into your store looking for that item. That’s why it’s important for today’s
retailer to know what’s happening on the web. Obviously, a negative mention will have the opposite effect. (See the sidebar item below.)

This presents the retailer with two different
challenges. One is putting knowledgeable
staff on the sales floor. If a potential
customer thinks she knows more about the product than your sales people do, you
will soon have zero credibility.

Assuming you have the right people on the floor, then the task
is to sell the product-knowledgeable consumer on the benefits of buying from you.  This consumer already has a good idea of what
she wants and how much it costs. Your
job is to convince her to buy it from you and to explain the benefits of being
your customer.



In today’s information age, it’s critical that you know what
people are saying about you, your products, and your competitors. There are web sites, like Google Alerts,
where you can set up news searches on particular words and phrases. When one of your search terms appears in a
news story, on a web site, or on a blog, you receive an email with a link.

For example, I have Google searches set up for all of our
products and our major competitors’ products, too. Today I received an email alerting me to a
blog entry concerning one of our competitors. Out of respect for the company (they make good products) and knowing that every story has two
sides, I’ll call them “Brand X”. The headline of the article? “I
Hate Brand X!”

He goes on at great length to describe the problems he’s had
with his dealer and the apparent indifference of the manufacturer. To make matters worse, he gives us an update,
quoting the email he just got from the manufacturer, telling him to go back to
the dealer to spend more money to get the needed product correction. He ends by comparing the company unfavorably
to Microsoft! Ouch!

Hopefully someone from Brand X will see this and get it
taken care of before the story spreads all over the internet. But it’s a good example of why we all need to
be aware of what’s being said, good and bad, about us on the internet.

Opportunity: Higher Levels of Service

This is number sixteen in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at Stanyon’s fourth Challenge (opportunity), "the need for delivery of higher levels of service."

I hate to sound like a broken record, but superior customer service is the single most important thing that a retailer can do to stand out from the crowd.  "Good service" isn’t enough anymore.  While bad service will drive customers away, good service won’t necessarily keep them coming back.  Satisfaction doesn’t equal loyalty.  For example, I just changed cell phone carriers.  My former company wasn’t terrible.  There were some things that I didn’t care for, but generally they were alright. On a scale of one to ten, they were probably a solid five.  I’m sure that if I had updated my plan and got a new phone, I would have been satisfied for another two years.

But, with the barrage of cell phone ads I decided to look around.  My new carrier offered the plan that I wanted with a phone that meets my needs.  My son in Alabama uses the same company so we can call him and he can call us at no charge.  That was the tie breaker. 

Had my original carrier ever done anything to distinguish themselves, to create a loyal customer, rather than a satisfied customers, I might not have made the switch.  Most of our conversations with our son are in the evening or on the weekends when the calls are free anyway. 

Am I unusual?  I don’t think so.  That’s just the reality of twenty-first century retailing.  You either stand out or you lose out.  It’s that simple.

This isn’t rocket science.  Why does it seem to be so difficult?  Why doesn’t everyone do it?  According to Stanyon it comes down to people and leadership.  We all know how difficult it is to find and keep good people.  In a survey we did here at Mine Your Own Business, hiring, training, and keeping good people ranked very high.  Face it, if you don’t have good employees your chances of having delighted customers aren’t very good.

One of Stanyon’s suggestions is that you don’t overlook any age group.  An AARP survey of workers age 50 to 70 found that more than 2/3 of them don’t plan to retire.  They’re smart.  They’re experienced.  They have a work ethic that’s hard to find among younger workers. 

At the other end of the spectrum, very young workers (high school through college age) can be excellent employees too.  What they lack in experience, they may make up for with energy, enthusiasm, and a lack of bad work habits.

Of course, the standard for the level of customer service in your business is set by the leader.  You must make it clear that delighted customers are your number one priority.  You have to walk the talk.  If they see you carrying a heavy item out to the customer’s car, they’ll do the same.  If they see you talking on the phone while a customer is waiting to be helped, guess what they’ll do when you’re not there?

Delighting your customers isn’t easy, but it’s absolutely vital if you want to compete.  You may have to do some things that you don’t want to do.  In the era of twenty-four hour "superstores", you can’t afford to be closed when your customers want to shop.  If you promise your customer after-the-sale service then aren’t there to answer the phone when she has a question, she will not be delighted.  She may not complain.  You might not even realize that she’s unhappy.  But one day you’ll wonder why you don’t see her anymore.

I’m guessing that you have no desire to be open around the clock and I don’t blame you.  But if your store hours are the same today as they were in 1970, you may want to rethink them.  If your customers are primarily working mothers, it doesn’t make much sense to close every evening at 5:00.  If your product is used on the weekend, then your customers are going to have questions and need accessories on the weekend.  You don’t have to be open at 3:00 in the morning.  No one expects that.  But it wouldn’t hurt to have a web site with a good faq section and some self-directed service areas for the night owls.

Think about your own service needs.  When have you gotten exceptional service?  What can you learn from it?  Ask the experts, your customers themselves.  Ask them what you could do that would make your store their favorite place to shop.  You may be surprised at how little it will take to move from the ordinary to the extraordinary. 

Remember that a pot of water at 211 degrees is just hot water.  Add one degree and it becomes steam.  Steam moves giant locomotives and ships.  Steam provides heat for huge office buildings.  But water at 211 degrees doesn’t move anything.  It’s waiting for that one last degree.

Opportunity: Technological Change

This is number fifteen in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at Stanyon’s third Challenge (opportunity), "the speed and overwhelming nature of technological change."

"Fear and Hope."  According to Stanyon, the small retailer fears the cost, complexity, and change of modern technology.  He/she hopes that the powerful benefits of inventory control and customer information will be worth it.  If hope doesn’t exceed fear, then nothing will happen and we’ll be left in the dust of more hopeful competitors.

For the most part, fast paced change also equals rapidly falling costs.  As we’ve discussed before (Point of Sale Systems, More on Point of Sale Systems), a complete retail automation system for a one-two store independent can be had for well under $10,000.  It hasn’t been that long ago that such a system was out of reach of all but the largest retailers.  The systems are more reliable and user-friendly than they were just a few years ago.  You no longer have to hire a high-tech (meaning high priced) computer expert to install your system.

So, why have many retailers resisted modern information technology?  According to Stanyon, it may be that the independent business person is just too busy to install the tools that would make his/her job easier.  We all have a tendency to spend our time on what Stephen Covey calls "urgent/not important" items, ignoring the "important/not urgent". (The Seven Habits of Highly Successful People.)  In some cases it’s fear of technology, especially among  baby boomers.  In other cases, it’s a lack of understanding of just what business automation can do.  "The real future power of intelligent POS systems can be found more in the customer tracking benefits than in the product/inventory tracking uses."

What???  How can that be?  Isn’t the ability to balance the books and control the inventory the most important part of retail automation?  In a word, "NO".  The bookkeeping piece of retail automation levels the playing field between large and small retailers.  Customer relationship management  is where you can leave the big guys (and the other small guys) in the dust.

Wal*Mart isn’t going to send its customer a post card thanking them for buying a particular widget and offering them a special discount on widget accessories.  Circuit City isn’t going to send a birthday card with a reminder that they just got a shipment of accessories for the (insert product here) that the customer bought last month.  Mrs. Preferred Shopper isn’t going to get a personal invitation to an after-hours event exclusively for customers who bought an XYZ in the last six months.

Having a needed item in stock isn’t going to make you stand out (unless you’re the only store in town that has it), but regular, personalized contacts sure will.


The Internet is another area of opportunity for the independent retailer.  While many of us think of the Internet as something that allows distant merchants to steal our customers, actual selling over the web is a small percentage of total retail sales.  The same fears that keep many business people from embracing technology also prevent most consumers from becoming hard line net shoppers.  While Amazon.com and a few others seem to have mastered the art (science?) of on-line selling, most consumer visits to the World Wide Web are to gather information, not to buy.

They may be looking for product information or they may be looking for their nearest retailer.  In either case, when they search on your particular widget, they should find YOU.  Every retailer should have a presence on the Internet, preferably an information-packed web site.  Web design is more affordable than ever.  While we would never recommend a cheap-looking site, a simple, elegant site is very affordable.  Using pay per click advertising and search engine optimization, you can drive potential customers to your site.  Then, when they’re ready to buy, they’ll come to you and not your competitor.

There are even free tools that will help your potential customers find you, like the free coupons on Google Maps.

You may or may not want to sell over your web site.  Experience shows that, unless you’re committed to spending a lot of time and money on an e-commerce site, it’s unlikely to be profitable, or even pay for itself.  You’re probably better off just providing information. 

A more detailed discussion of the mechanics of POS and web technology is beyond the scope of this particular post, but I’ve provided a few links below to some more in-depth information. 

Let’s just say that in today’s world, you can move forward or you can fall behind but staying the same really isn’t an option.

Links to more information:

Dell’s QuickBooks
Microsoft’s Point of Sale System
POS article from CNET.com
"Buying Online Ads for a Local Audience" from the Wall Street Journal
"How to Get the Most from Online Directories" also from the Wall Street Journal
Wikipedia article on Point of Sale Systems

Product Sourcing

This is number fourteen in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at Stanyon’s second Challenge (opportunity).

Challenge #2

Difficulties in product sourcing and merchandise acquisition.

If you’re a Tacony Corporation customer, this shouldn’t be a problem for you.  Stanyon cites (1) shrinking vendor structure (2) vendor minimum orders for single shipments and minimum annual purchases and (3) quantity pricing as issues which make it difficult for the independent to compete.

He says that "Manufacturer and distributor consolidation and the channel crossing of products are causing many problems for small independent retail."  Standardized products and the pressure for manufacturers to sell through multiple channels are two problems that Stanyon mentions.

He goes on to say that independent retailers can take advantage of sourcing new manufacturers and suppliers who are looking to establish themselves with innovative new products.  We couldn’t agree more. 

This may be shameless self-promotion, but Tacony Corporation began as an independent retailer sixty years ago.  Through the years we’ve grown our business by providing protected brands that the independent retailer can sell without fear of their customers seeing the same thing at the big box store down the street.   To be fair, we’re not the only manufacturer to do this, but many others have chosen a different approach to the market.

As a family-owned company, we don’t have the pressure from stockholders to constantly increase the value of their holdings.  We put pressure on ourselves to continually come up with new, innovative products and better, more efficient ways to serve our customers.  Our goal is to be the best, not the biggest.

Stanyon says that "another important aspect of the product sourcing challenge is often the need to establish an anchor brand to provide added credibility for other desired suppliers."  Unfortunately, many of those "anchor brands" are sold through multiple channels and offer profit margins that aren’t acceptable.  They become victims of their own success.  Their credibility comes from national advertising and wide distribution, which drives the price down making the product unprofitable for the smaller store.

One of the means for a dealer to increase profit margins is membership in a buying group.  Buying groups provide purchasing power and other benefits.  Their downside is that the dealer loses a certain amount of control by being a member.  A diversified supplier who specializes in the independent retailer market, not selling protected brands to mass merchants, provides many of the benefits of belonging to a buying group without the limitations.

In summary, it’s important that the successful retailer be a good shopper.  Work with your vendors, whoever they are, to increase your business.  Keep your inventory fresh by bringing in new products whenever possible.  Work with your manufacturers’ sales force to come up with new promotions, new in-store displays, and anything else that will increase your business.  Ask them what’s working for other dealers in other towns.

Network with other retailers at trade shows and conventions and don’t overlook those in other, non-competing industries.  The lawn and garden store, or the bicycle shop, or the bakery has many of the same problems that you do and you might just be able to brainstorm and give/get some good ideas. 

Urban Sprawl

This is number twelve in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at the trend of urban sprawl and real estate development.

Stanyon’s final trend is "Urban sprawl and real estate development."  He points to the spread of "the new urbanism", mixed use developments where people can live, work, and shop.  A prominent example, and one of the first of these new communities was Celebration, FL, a Disney project.

Celebration is a city in itself with homes, stores, and entertainment.  It has its own post office and its own schools.  Theoretically, someone could spend their entire life there, never having to leave.  Other such communities are popping up all over the country, but the more typical "new urbanism" area isn’t quite so self-contained, although it has similar features.

This form of "the new urbanism", one that may have more relevance for our type of business is the "lifestyle center" which seems to be replacing the more traditional shopping mall. Lifestyle centers tend to be smaller than traditional malls with an emphasis on specialty stores rather than big anchors.  They usually feature an open-air design and parking close to the stores.  They appeal to shoppers who are in a hurry and who don’t want to negotiate a huge indoor mall to get what they want.  There is usually a sit-down restaurant or two and there’s likely to be a Starbucks or something similar.  While the number of new malls is declining, the number of lifestyle centers is booming.

Because of their smaller size, there can be more lifestyle centers located closer to residential areas, which appeals to today’s busy consumer, especially with the high cost of gasoline.

Stanyon quotes David Szymanski of the Center for Retail Studies at Texas A&M who said, "Americans are seeking more of a sense of community.  Lifestyle centers, you look at them and go, ‘I like these places.  I feel comfortable here.  These are the kinds of things I like and these people understand me as a customer.’  And the other part is that they are located where these customers live."

In other words, exactly the sort of environment they might find in most independent retail stores.  Comfort, convenience, and individualized service is exactly what you do best.  While no one is predicting the death of the indoor mall, especially in colder climates, lifestyle centers are the trend of the day.  Isn’t it ironic that everything that describes a lifestyle center also describes  downtown?  You remember downtown?  That’s the place everyone moved away from in the 60’s.  Now  we’re building  new downtowns in the suburbs.  Go figure.

Customer Attitudes

This is number eleven in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at the trend of Changing consumer attitudes and behavior.

Today’s customers can be overwhelmed by the amount and variety of messages that come their way every day.  Add to that the huge number of shopping choices that are available today and it’s no wonder that consumer attitudes and behavior are changing.  According to Stanyon, "People are more fluid in their shopping behavior.  They no longer sit still confortably in a single segment….Today, the same customers will buy a luxury good in the morning and then buy a lowest discount price item in the afternoon. 

As we discussed in an earlier post, "Hunting for Treasure", Michael Silverstein describes this trend in his book, "Treasure Hunt:  Inside the Mind of the New Consumer".  Today’s consumer may scrimp on comodity items and use the savings to upgrade on items they consider important.  Our job as merchants is to make our products and service so desirable that Mr. and Ms. Consumer will be willing to forego the best toothpaste and laundry detergent in favor of doing business with us.

Stanyon goes on to say that "we value most what is most scarce."  Time, which is only available in units of 24 hours per day and seven days per week, seems to be the thing that most Americans desire.  Since no one gets more than their daily allotment, using it efficiently is very important to a lot of people.  Independent retailers offer the in-a-hurry consumer the advantage of close-by parking, personal service, and no-hassle checkout.  This explains, at least in-part, the decline in shopping mega-malls and the growth of the so-called lifestyle centers.

One thing that’s constant, especially in the twenty-first century, is change.  Not long ago, most consumers wouldn’t even think about making a major purchase on the Internet.  Today it’s common.  Customers attitudes change much more frequently and loyalty isn’t what it used to be. 

As I follow various Internet groups that discuss products that we sell, I often see a core of loyal customers.  But I also see "influencers".  These are people whose opinion is clearly valued by other members of the group.  If they reccomend a product, a retailer, or a web site, other members of the group will act on that reccomendation.  On the reverse side, let one of them say something negative and others will quickly jump in with their own stories to back up the negative comment.

The point is that you’re only as good as your customer’s most recent experience.  Years of satisfaction can be wiped out by one less-than-satisfactory visit to your store, even if that visit was by someone else.

What’s the solution?  Someone once said, "treat them so many ways that they have to like one of them".  That’s a start.  Every member of your team has to be "on their game" for every single contact, whether it’s in person, on the phone, or over the Internet.  You can’t afford to give your customers a reason to even think about going somewhere else.

As the owner/manager, it’s up to you to make sure that every transaction goes beyond the ordinary, even beyond the great.  Exceed their expectations.  As Tom Peters says, leave them saying "Wow!"  Give them a story to tell their friends.  Make the experience of shopping with you such a treat that they won’t even consider shopping elsewhere.  If people truly are "more fluid" in their shopping behavior, then you want your business to be the one they "flow to", not the one they flow away from.

More on Generation Y

In a recent post we discussed the members of Generation Y.  These are the sons and daughters of the Baby Boom generation, born between 1982 and 2000.  In an article called Gen Y sits on top of the food chain in today’s issue of USA Today, writer Jayne O’Donnell gives us more insight into this powerful demographic.

Online marketing expert Kelly Moony has researched this group and found some interesting things.  One is that they’re turned off by slow web sites, dismissive sales staff, and free shipping that’s too slow.  That’s probably true for most of us.  The difference is that these young people will express their unhappiness on their MySpace page, in Instant Messages, and on their blogs.  If you turn one of them off, you run the risk of alienating an entire generation.  She finds that they want merchandise that’s either cheap or elite, something that we’ve discussed here previously, too. 

Moony says that Y’s are more savvy than they’re given credit for and "in some instances they think they know more than the person selling them something."  I’d have to disagree slightly.  In some cases they do know more than the person selling them something.

Consumer psychologist Kit Yarrow is quoted as saying that these young consumers have an "equal vote in the look and style of the family."  No argument there.  My two "Y’s" definitely influenced my recent car purchase.  (My daughter has better taste than I do and my son knows more about cars.)

The bottom line is that this group of young people has money to spend now and will have a lot more to spend in years to come.  They know what they want and they know how to get information.  We’d better pay attention to them.

More on Health Insurance

This is number ten in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at the trend of Health Care Costs.

In an earlier post we discussed the ever-growing problem of employee health insurance.  Turns out health care costs are challenge number six on Stanyon’s list.  He calls it "The most important domestic problem in the U.S." 

High insurance costs hit the independent business with a double whammy.  First, insurance companies charge higher premiums to smaller firms.  This gives the larger competitors an unfair advantage.  Second, because we Americans expect our employers to provide health coverage for us, if you don’t offer it, you’ll never attract the best employees. 

An editorial last week in the St. Louis Post Dispatch said, " A
record 46.6 million Americans were uninsured last year, largely because
the number of people getting health insurance through their jobs has
declined steadily. In 2000, 64 percent of Americans got health
insurance at work. By 2005, it was 59.5 percent.

In part, that’s because insurance premiums have increased much faster
than inflation. On average, family coverage now costs about what a
full-time, minimum-wage worker makes in a year.

Part is also because of the growing role of small business in the local
and national economy. Small companies often don’t have enough workers
to get affordable group health insurance rates, and their premiums can
rise quickly if one employee gets seriously ill."

As mentioned in our earlier post, some progress is being made on a federal law to allow smaller employers to join insurance pools which would decrease the risk for the insurance companies and lower costs for the independent business.  Considering that independent business pays more than 45% of the total US payroll, health insurance relief should be a top priority of the House and Senate.