A Great Business Owner Will Use Whatever Resources Are Available

Good ideas are hard to come by, but even harder to find is the motivation to take the epiphanies that precede a company and bring them to fruition. The government of the state of Michigan wants to help facilitate this process and has done so by providing a website that gives relevant information about starting a business to everyone with Internet access. This means that people from all income levels can chase their dream of becoming an entrepreneur, of becoming their own bosses, of bringing themselves and their loved ones out of poverty.

A lot of people are saying that the American Dream is dead. I agree that the traditional concept is gone--it's flown (or maybe it was thrown?) right out the window. Still, government programs like the aforementioned one--which is known as Michigan Business One Stop--are trying to centralize the necessities of starting, opening, and running your own company, whatever it might be. Visitors to the website will notice plenty of information, including guides to starting a small business, resource navigators, county clerk directories, business plan tips, Employer Identification Number applications, and a plethora of other helpful links. There is even tax information here--perfect for people who don't know how to get around in the world that opens up when one tries to own their own business.

Visionaries and entrepreneurs can explore the website while they let their business ideas ferment in their heads--it will definitely take some serious virtual spelunking to grasp the vastness of this resource. But when you're ready to move on to one of the toughest hurdles for a business--finances--MBOS even has a list of options that can help you push forward and turn your idea into a reality. These include programs from the U.S. Small Business Administration, venture capital financing, state loan programs, and demographic-specific business centers. The best part of these options is that a business doesn't need to be new to use these avenues; current owners can use the same routes to expand existing businesses.

Cities like Detroit need potential business owners to step up to the plate and take a swing. | Photo courtesy of Shakil Mustafa

But like most things that the government works on, this website has its flaws. As mentioned, there is a lot of information here--too much even. Navigation seems simple but I've found myself lost on this platform several times, especially when I was trying to start a business of my own. Fortunately, there is a help center and a virtual tour for this resource. Even with these though, the site is still rather confusing. A redesign of it may be helpful for both potential and current business owners in the state of Michigan. I've got my fingers crossed that this program will get better with time. Although the American Dream as we have known it may be dead (was it the Great Recession that killed it?), there is still hope for those who are willing to put in the time and effort it takes to make something from scratch, to build a business from the foundation up.

Could Your Business Handle a Disaster or Another Economic Downturn?

In the past few years, several large corporations--mostly banks--have been called "too big to fail." This is the type of security that small business owners often wish they could have for their own operations, for their own peace of mind. But the tumultuous economy keeps slinging different statistics into the fold, reporting one month that everything is going swimmingly and then, in the following month, that everyone is in danger of drowning. Mix in the precarious nature of the planet and you have a recipe that could leave many owners without the ownership they once treasured.

So, we know this: The American status quo is uncertainty. With conflicting data and vague standards, economists and organizations are struggling to agree on the current economic state of the country. As scary as that might be, it gives some businesses the chance to thrive and others the chance to close their doors--not all owners can manage well under the chaotic reign of unpredictability.  (And obviously a blizzard can be a windfall for a snow removal business while being a mini disaster for a shipping company.) The anxiety caused by this may force an owner to shut down before becoming a victim of uncontrollable factors. But it is when owners are caught by the unknowable variables of the volatile world--be they related to money, weather, whatever--that their own determination and resilience can shine through.

Serious infographic on businesses
and disasters. | Courtesy of
Alibaba.com et al.

Let's say that a tornado hits your business. Or a flood. Or a drunk driver crashing through your storefront. Or an(other) economic downturn. In case you don't get the picture, there are a lot of independent elements in the world that can inflict damage upon your business. In order to counteract the consequences of such occurrences, small business owners should prepare. Euphemistic individuals often call these "rainy day" funds, but in reality, they are disaster prevention/reaction funds.

According to the U.S. Small Business Administration, an estimated 25 percent of businesses that have been struck by a natural disaster will fail due to the ramifications of such an event. This likelihood is too risky to leave to chance. In response, intelligent owners create a plan and tuck away money, providing hopeful longevity for the business. But what about economic issues? A recent report from payroll services provider ADP indicated that, in August, businesses with less than 50 employees added the least amount of jobs since May. But 71,000 jobs were still created; reports suggest that many of them were part-time positions. Meanwhile, a survey of members belonging to the National Federation of Independent Business indicated that hiring trends for small businesses declined for the fourth month in a row. Before you get worried, remember that uncertainty I mentioned earlier? Polling performed for the CBIZ Small Business Employment Index indicated that hiring trends for small businesses rose 1.23 percent, the first increase since May. Be sure to note that this index asks approximately 3,500 companies, each with less than 300 workers, about individual hiring trends.

With so much conflicting data, what is an owner to do? If you are holding the reins of a business, you should do your best to be ready for the worst while maintaining a positive attitude. If you get caught up in paranoid preparation, you may find yourself becoming resentful toward the world--this could get in the way of running a quality business. It's impossible to be ready for everything, so do your best with what you have to ensure that your business is protected to the best of your ability.

The Small Business Sector Has Risen

Saying that the recession trimmed the fat off the small business sector would be putting it lightly. Starting your own business is typically an up-hill battle but when the economic floor suddenly fell out from under the feet of so many Americans, a number of both new and old businesses came tumbling down, never to return. But now, data from several sources is showing that optimism regarding small businesses is on the rise with many owners estimating higher revenues and profits over the next 12 months.

According to a report from Wells Fargo and Gallup, the small-business optimism index for August was the highest it has been since the third quarter of 2008. A similar report from the National Federation of Independent Business indicated that last month's optimism was at the fourth-highest level it has been since the group started taking readings of the industry in December 2007. More detailed information from The Wall Street Journal/Vistage Small Business CEO Survey showed that 73 percent of the 678 participating business owners expected higher revenues in the subsequent year. Researchers with this outfit also found that 54 percent of small business owners expected profits to increase during the same time period. After analyzing previous data, it was determined that these are the highest proportions seen in these categories since June of last year.

So, what does all of this mean really? Well, it could mean good things are coming for many small businesses in Michigan and throughout the nation. But the recession is still having lasting effects in some areas, continuing to stop a fraction of business owners from getting on the ride of the recent economic resurgence--roller coaster that it has been in the past handful of years. For some owners, this might mean more cutbacks and closures in the future. But where I live, a number of small businesses have been taking a chance, opening, and subsequently thriving. In our downtown area, local residents can't stop talking about the new market that was built this year--it now houses a slew of entrepreneurs trying their hands at this and that. Elsewhere, restaurant options have been popping up left and right--the key to the food ventures that will last is three-pronged: good food, good service, and good prices.

Talk about a corny image: the key(s) to success! 

Substitute the word "product" for "food" and you have a solid business model for any up-and-coming company. It may seem like a no-brainer, but some owners neglect the obvious route of considering what customers enjoy in a restaurant or an auto shop or a grocery store or any other place of business. It's a rather simple formula and with it, many endeavors have gone far. With the effects of the recession dwindling, the playing field is leveling out and many more business owners will likely see their businesses blossom, as long as they understand their customers and the situations surrounding their businesses.

Your Business is Small: Use This to Your Advantage When Considering Benefits

As a small business owner, you may not be making as much money as the big dogs, but you are certainly more versatile. It's simply easier for a company that has less product, less demand, and less of a workforce to adapt than it is for businesses with a big footprint--this is one of the best advantages that smaller companies have over corporate giants. As proof of this factor, many owners have become creative with employee benefits, often maintaining and retaining quality employees and sometimes picking up new customers along the way.

For instance, some companies offer employees a week of paid time off so that they can volunteer. This is an incredibly intelligent move. Even though it may seem contrary to the idea of making profit because it costs the company for labor that isn't happening, it can be extremely beneficial for all involved parties. Volunteering can be very refreshing for an individual and it can be really enlightening, as well. Lessons learned can be brought back into the workplace once the person returns from their "vacation." In addition to this, the company's public image becomes even stronger than it was because it is paying its employees to give back to the community--such a benefit is a win-win-win for business owners, employees, and nonprofit organizations.

Another benefit that a corporate conglomerate cannot provide to its workers is the ability to bring pets into the office. In some cases, these may be the owner's animals--at the office where my roommates are employed, the owners' dogs are always there. Allowing employees to bring their pets to work from time to time can give workers a change of pace that prevents labor from going stale. Obviously, this wouldn't work in a manufacturing center and would probably be more ideal if your employees were desk-centric. Companies that do this often have a catch though: No pooping in the office and no animals that are irregularly loud.

Some companies encourage their employees to bicycle to work.  Whether this encouragement comes in the form of installing a bicycle rack or offering a reduction in health care premium costs for the additional exercise depends on the budget and outlook of the employer.  However, a study by the National Center for Health Statistics found that active, physically fit employees have lower rates of absenteeism.  So a monetary incentive for biking or walking to work might pay off for businesses.

Maybe your dog will learn some new tricks while at the office | Courtesy of Albany.com

My favorite benefit is this one though: The company picks a certain day of the week--Friday, perhaps?--and purchases beer for everyone. In case you don't know, I'm an avid beer drinker and this perk sounds too good to be true. Basically, employers let their workers drink while on duty or on lunch--within reason--and it tends to keep morale higher than normal, often making the end of the week even more enjoyable than it already is with the weekend around the corner. This is another perk that has its hang-ups, though: Some people may not want to consume alcohol or may disapprove of the behavior. Giving alcohol to your employees may also be a very bad idea in certain industries--in other words, use your best judgment before implementing this.

Providing any of these perks would either be too complicated, too messy, or too expensive for any major business to pull off. So instead of letting your employees disappear into the corporate cracks of your market, consider implementing some cool benefits. Remember that customers hear about how employees are treated and some may cease their patronage if your employees are not treated well. Adding more positives to the pros vs. cons list for these benefits is the fact that similarly-minded customers may decide to shop with you instead of your competitors because you treat your workers with dignity and respect. Remember that your size is an advantage in this regard and that flexibility is key to achieving success.

Thinking About Hiring? Be Sure Not to Discount the Millennials

When a business begins to grow, it may mean that it's time to begin hiring people. Sure, your partner or your children may have been able to pick up some slack here and there, but a part-time or full-time employee can be much more helpful, considering the dedication they must have to the business. But how do you select the right employee from the candidate pool? The obvious answer is to interview the candidates and consider each of them individually, but what if your own thoughts about people--specifically, those in regard to age--are getting in the way of your selection? Your biases could be holding your company back, so you better get past some stereotypes that are floating around largely thanks to media.

Some of the most ridiculous stereotypes out there right now surround millennials, people born between the years 1982 and 2000. Considered to be lazy, apathetic, and prone to mooching, the millennials are getting a bad rap for reasons that escape many of those that are included in this demographic. Like baby boomers before them, the news media has put millennials under the microscope and dissected them bit by bit, typically reporting findings that are negative. For instance, a number of articles have highlighted the fact that some millennials are still living with their parents. Though this is true, wasn't it true for previous generations like Generation X? People fall on tough times and with the massive costs associated with college--and the social expectation to enroll--countless teenagers have been groomed into educated, indebted twentysomethings.

An infographic explaining some of the intricacies of Generation Y. | Courtesy of Flowtown

Combine this with the economic downturn and, suddenly, many of these newly graduated college students couldn't find a job, let along afford an apartment. When the media started asking why, they began examining and blaming the personality traits of those who had received the short end of the stick. Of course they found negativity and apathy and angst: Wouldn't you be upset if you were told that college would get you a great job and those expectations fell flat? So, now there is an educated class, eager to work toward and for their passions, but many people have been convinced that they are lazy good-for-nothings, further complicating the debts they cannot pay. These stereotypes are false--many millennials possess entrepreneurial spirits and tend to be marketing savvy. They know that quality of product matters and that success takes hard work--their life experiences so far have largely convinced them of this latter understanding. Moral of the story is this: Do not underestimate millennials when considering them for a position. In fact, don't underestimate any applicant based on your own assumptions--it could mean the difference between your business succeeding or failing.

Don't Be Afraid to Fail, Just Make Sure You Don't Let Lessons Go Unlearned

At lunch the other day, my mother and I were sitting next to a man who was eating alone. Typically, these individuals stay within themselves, but our conversation piqued the man's interests so he spoke up. We ended up talking about an array of topics, but most important (to this blog) was the fact that he owned a business. The man's name was Sam and as we got talking about his ownership, my mother threw in a line she's begun saying with pride: "My son's opening a hostel over in Grand Rapids." While that was, at one point, more true than it is now, my partner and I have put the project on an indeterminate delay. So I told Sam this and he replied with a piece of wisdom that many have forgotten, telling me, "You're young enough to fail over and over again and still come back from it."

The word "failure" often strikes fear into the hearts of people, be they world-class athletes, a high-schooler taking a standardized test, or a small business owner shuttering the doors. Each of these types of people has their own environments and thresholds for defining failure. But even with different definitions, many people fail at failing because they let valuable lessons slip by while they wallow in their own self-centered concerns. For business owners, this may mean losing a major source of income--maybe even their only source of income. But even when times are tough, a strong entrepreneur keeps her or his analytical mind open. Consider examining the decisions that led to the closure or downsizing of your company--basically, what got you to where you are now? Was there anything you overlooked? Could you have asked for help at any point? If so, why didn't you?

While my partner and I were working hard on Stay Hostel, we were doing our best to generate awareness and keep interest alive. While interest was high--we even met someone who said "You're the

guys opening the hostel?!?"--it did not lead to any major financial assistance. One of the best things we received was the help of a real estate agent who would let us get a better look at prospective properties, free of charge. As I've said before though, money was an issue (because we didn't have any), so purchasing a property was largely out of the question, for the time being. We had chosen to go nonprofit in order to generate donations but then we realized that we were the only people who were really doing any work for the project. We had a board member acting as our treasurer, but he was too busy to put too much time on the ground. Another board member was present at one point, but he backed out when he realized that he had spread himself too thin.

Eventually, the fate of the hostel was left up to a single decision--that's how I see it, at least. We were

Uncle Scrooge says you've got to be "tougher than the
toughies, and smarter than the smarties!" You'll only get
smarter and tougher through trying and failing.

offered work at the Wayfaring Buckeye in Columbus after staying a single night there. Opportunities like this are pretty rare, from what I've seen, but good networking can bring them about. The issue was that I couldn't afford to pay rent in two places. But a buddy was looking for a place to stay, so there was hope. In the end, he decided not to take my place and I was prevented from gaining experience as a hostel manager. Soon after, we decided that we would dissolve the nonprofit and chase a for-profit endeavor, if we ever chose to ramp the project up again. Considering this a failure on our parts, we dwelled a bit on it. But soon we realized that we had spent a year honing skills we never knew we possessed: networking, organizing, interviewing, social media marketing and web design, just to name a few. While we may have failed, we developed ourselves and will take the skills we've gained and the lessons we learned into the future.

Data on Small Businesses is Hard to Collect; Internet Remains Viable Marketing Option, Regardless

It seems that the number of workers in the U.S. has risen again, pushing the unemployment level down to the lowest it has been since December 2008. By adding 162,000 jobs, employers have brought the unemployment rate down to 7.4 percent--according to the U.S. Department of Labor. Even with these detailed figures, experts are uncertain about the employment rates among small businesses. According to a report from the National Federation of Independent Business, the number of employees lost per business in July was 0.11 workers. But a conflicting report from ADP said that small businesses added 82,000 employees that month, contributing more than 40 percent of all new payrolls.

This conflict underscores the perplexity of gathering data for small businesses; it can be extremely difficult--nearly impossible, in some cases--to get a realistic estimate of the goings-on in the small business industry. With so many people opening and closing their own start-ups each year, the market is constantly in flux. An accurate picture becomes very hard to develop, especially when a number of people are operating out of their homes. Studies indicate that nearly 70 percent of entrepreneurs in the U.S. choose to start their businesses in their residence. Nearly 60 percent continue to work from home after their businesses have become established.

But with the Internet in the majority of our homes and literally a single click away, this should not be surprising. If you are running an online business and you have space to store product at home, working out of your house should be a no-brainer. There is no reason to pay extra for an unnecessary retail space when the majority of your sales are online. Not to mention the fact that you can write a home office off during tax time. Even better is the fact that, on most days, you can work in comfort because the only presentation that matters online is that of your business. When doing in-person business though, much of the game changes.

But even for the people who have an actual storefront, the Internet can be extremely helpful. Using it to bring in more customers is a great strategy as many individuals turn to their computers and smartphones for suggestions and reviews in their locale. If you happen to be an automotive repair shop that has a solid online presence--and you have good reviews, which you will if yours is a business that respects its customers--it is likely that you'll start receiving more clients in the near future. People often turn to Google to diagnose issues with their vehicle, just like they do with their bodies; if you can determine the keywords that people typically search for in the geographic location of your business, you may be able to get your business to pop up during this diagnosis period. Online marketing strategies exist for every type of small business. Using these may help grow your company into something both concrete and profitable, giving you the ability to hire more people and further contribute to the employment rate.