The American Jobs Act
Published by Bob Foster· 6 Comments
Well, we’ve seen the President’s new jobs plan—The American Jobs Act—and it looks pretty much like the programs of the 1930′s (which didn’t work very well then until the second world war started). Although I think it is a good idea to fix some of our roads and highways before they are beyond repair, the jobs incentives fell woefully short of accomplishing much of anything.
All the small business owners I know hire employees to grow their business in support of an increase in sales. Likewise, when sales fall off, we all reduce our workforce because there is not enough for all the workers to do. Most small businesses do not have huge cash reserves to carry non-producing workers.
To take it one step further—in a growing economy most small business owners will hire more employees in ANTICIPATION of increased business. However, no anticipation—no hiring.
The federal government can pass out all the incentives they want—in the form of hiring bonuses, payroll tax reductions, and on and on—but the fact remains; if a small business owner does not need a new employee to fill a current (or anticipated) job opening, they will NOT hire a new employee. Small business owners are too savvy to fall for the government’s financial smoke and mirrors incentives.
Why aren’t the people in the White House and Congress smart enough to know this?
Maybe this is one reason why:
- Only 8.4 percent of all lawmakers majored in a field related to economics.
- Only 13.7 percent of lawmakers studied business or accounting.
- Only 11.5 percent studied a field related to science or technology.
- Over 55 percent focused on government or law studies (perpetuation of professional politicians?).
(Data from The Employment Policies Institute [EPI]).
I have yet to find any information on how many people in the White House, or in Congress, have actual experience as an entrepreneur in a small business—but it appears the number would likely be quite small.
And we wonder why Washington cares so little about small business!
Where does this situation leave American Businesses? I think a recent article in The Huffington Post spelled it out pretty well—at least in the manufacturing sector—with the title: “American Manufacturing Slowly Rotting Away: How Industries Die.” What more can I say?
What about your business? Your industry?
I am also wondering if this situation is endemic to the U.S., or do other developed nations, such as the European Union also suffer from government suppression of small (or not-so-small) businesses?
Leave a comment and let me know how your business/industry has been (and is being) affected over the last few years.
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Solar Panels–Forget “Made in U.S.A.”
Published by Bob Foster· 2 Comments
Three American solar panels manufacturing companies bit the dust in the last month. A fourth, BP Solar, closed down its U.S. plant last spring, moving its operations to China, India and other countries. This leaves China as the dominant manufacturer of solar panels in the world. It should also be noted that China exports 95% of the solar panels they manufacture–many to the U.S.
Moreover, of the two remaining major American manufacturers, the dominant one, First Solar, builds their panels in their factory in Malaysia.
And don’t think it’s because labor costs in China, India, and Malaysia are lower—solar panel manufacturing is NOT labor-intensive…production labor is a very small part of the manufacturing cost. That is why solar panel prices are dropping like a rock—technical innovations (by China) in the manufacturing process make the price of solar panels more affordable for home installation as well as general power production.
But, take a look at the business environment under which solar panel manufacturers in China operate:
- They receive loans from state banks at very low interest rates.
- They receive free or subsidized land to build their factories on.
- They receive extensive tax breaks—at all levels of government.
- China provides a variety of additional government assistance programs.
- China also has a strong base of qualified technical employees.
Contrast that list with what American companies are up against:
- There is no such thing as loans with very low interest rates—even when guaranteed by the U.S. government. (See Solyndra, Inc.)
- Land in the U.S. is extremely high-priced, and especially so for Industrial-zoned land.
- With the exception of a few cities and towns that may defer some property taxes, the additional taxes and local fees for studies, analyses, permits, and government oversight are near criminal levels. (More on this subject coming in future articles.)
- There is little, if any, form of federal, state or local government assistance for developing a for-profit business—this is especially true for smaller businesses. In fact, most local governments try to milk every dollar they can out of small business.
- Finding qualified technical employees in the U.S. is becoming harder and harder, even in these times of high unemployment. (For more information, check here.)
President Obama is about to address a joint session of Congress (and the public) about jobs and the economy, and if he doesn’t address the issues of government suppression of small business, he might as well save his breath to cool his porridge.
I have brick and mortar small business clients that regularly run into the problems outlined above—but, what has been your experience in this area? Please leave a comment, or contact me directly and let me know. I live in the Western U.S., and maybe things are different in the East. I also understand there are many countries that do not have these same problems, so I would like to hear from you also.
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Are You Digitally Fatigued?
Published by Bob Foster· Comments Off
You may be digitally fatigued and not even know it. As smart phones and electronic tablets become more prolific and sophisticated, we seem to naturally gravitate toward these new digital opportunities.
But…is this a good thing? Do we now spend so much time in the digital world that we can no longer think creatively—or socialize face to face?
Here’s some interesting information I ran across the other day: And what has all this activity really accomplished—other than lining the pockets of Venture Capital firms and a few overpaid corporate executives? Let’s think about this for a minute… What do the following things all have in common: ANSWER: All of these great achievements were created and constructed before the advent of the digital age—no computers, no cell phones, no satellites, no social media, no video games, no… MOREOVER: How many great inventions and accomplishments have been made since the dawn of the digital age—or perhaps more importantly over the last 4 or 5 years? Certainly, all the above things (and many more) have been improved upon and enhanced since their creation, but what truly new creativity from the minds of mankind has produced something of the magnitude of the above list? And these are only the bare statistics—what about the workings of the human mind? I wonder what would happen if, for instance, the 1 million hours per day spent playing Angry Birds were spent just “thinking”…thinking about new ideas, new possibilities, new creations, new businesses, new solutions to problems, and on and on? With more creative thinking, could we have invented new products, started more new companies, hired more people, trained more engineers and scientists? I don’t know…maybe…probably. Then of course, there is the issue of interpersonal relationship skills (or lack thereof). Personally, I would rather sit across the table from someone in a restaurant talking about all the great ideas I had during the day, than sitting there alone texting or tweeting about the food I was eating. All my life I have been an early adopter of new technology (my first PC was made by Zenith, and my first cell phone cost $2,500—with no one else to talk to), but now I am beginning to wonder. When I compare the relationship between the minds of mankind vs. the reliance on gadgetry and mind-numbing social media that is consuming our lives…I wonder if, in the big picture, mankind has not taken a giant step backwards. So, do you think you have digital fatigue, or are addicted to your digital devices? How would your life change if suddenly the Internet and all wireless service went down and there was no more social media, no more email, no more text messaging, no more cell phones, no more Kindle, and on and on? Could you survive? Could you be productive? Could you be creative? * Published by Bob Foster· Comments Off
Last week I wrote a blog post about an alternative funding source directed at “creative” entrepreneurial projects. The enterprise featured in that article is called Kickstarter, and they claim to be “…the largest funding platform for creative projects in the world.” In terms of number of projects funded, I believe them. However, there are more ways to support budding entrepreneurs in the arts world than just providing money. A reader recently called my attention to another interesting concept for supporting creative entrepreneurial projects. This particular concept is based on a non-profit organization that provides goods and services, at little or no cost, to aspiring music groups in the community. One of the most notable examples of this platform is an organization based in Bellingham, Washington called Make.Shift. This non-profit organization provides space for music groups to practice and perform, and they are now expanding to include entrepreneurial people involved in the visual arts. They just recently obtained a vacant facility in downtown Bellingham, and are in the process of remodeling it to accommodate their members. But, what I found most interesting, is that in addition to providing activity-appropriate spaces for creative entrepreneurs, they also provide a number of special services that include: For a closer look at Make.Shift, take a look at the following video that was made to solicit funds for moving into their new building: (email subscribers can view on my blog.) Incidentally, Make.Shift put up a request on Kickstarter for this project and exceeded their goal by 40%. So, that’s what the innovative folks in Bellingham, Washington are doing to support their young (and not so young) entrepreneurial artists—why not start something similar in your community? * Published by Bob Foster· 1 Comment
Crowdfunding seems to still be popular despite mixed reviews on how successful (or unsuccessful) it was for many funds-seekers. However, to me, there always seemed to be a pattern develop within each of the peer lending sites, that favored “creative” or “social” projects far better than other kinds of new business ideas. Perhaps, that explains the apparent success of Kickstarter, a crowdfunding site just for creative projects—and only for creative projects. Kickstarter was founded in 2009 as an online funding source for filmmakers, designers, musicians, and other types of artists. Interestingly, the people who provide funding for these projects are actually “contributors” rather than “investors,” because they receive no return on their investment or equity in a project. However, they are usually promised some token award—a personal phone call thanking them, a copy of a CD, a T-shirt, dinner with the artist, or some other token related to the project. Some filmmakers offer contributors over a certain threshold a “credit” in their film as “Executive Producer.” One filmmaker promised to make a personal call to anyone contributing $10 or more. He is still working on his list of over 3,000 names. The amounts sought after range from a few hundred dollars up into six figures for Indie films. Filmmaking and music seem to be the big attractions with over 3,000 films being funded. Of these, several have passed the $100,000 level, with one film raising over $345,000 (they were only seeking $125,000). Here are some statistics about the success ratios of project requests after only two years of operation (all statistics are current as of July 17, 2011): There are obviously people out there who want to support the arts and are willing to contribute money to do so. This is likely why Kickstarter has succeeded where other crowdfunding sources have failed—or somewhat failed. The funding process works by the artist creating a short video pitch, posting it on the Kickstarter website, and setting a fundraising target and time frame. It is an all or nothing arrangement. A project must reach its funding goal within the time specified by the artist, or no money changes hands. When goals are met, the money is collected from the contributors, Kickstarter keeps 5% plus credit card merchant fees (through Amazon) of around 3-5%, and the rest is passed on to the project creator. So, if you are the creative type of small-business person looking for funding for your project, you just might want to consider Kickstarter. Who knows, there may be a patron out there somewhere who is taken by your passionate presentation and starts the ball rolling on funding your project. Just remember that it will be the quality and content of your video that attracts the patrons. You can visit Kickstarter.com to find all the information you need to get started. It is worth the visit to the site just to see some of the videos that people have sent in requesting funding—some of them are very good. Check ‘em out and let me know what you think. Note: I have no connection whatsoever with Kickstarter.com. This article is information for small-business owners, snd is provided as a service only. * Published by Bob Foster· Comments Off
It looks like the incandescent light bulb is going the way of the dinosaur. So, instead of lamenting its demise, let’s see if we can’t garner an idea for a new business out of this change. What does the incandescent light bulb produce? Obviously, it is light and heat. I just saw some “expert” on TV say the incandescent bulb converted electricity into 10% light and 90% heat. Now, with the advent of the new energy efficient bulbs, a little electricity is converted into more light—and the heat is practically eliminated. And therein lies the idea for a new business. Incandescent bulbs are (were) used as heat sources far more frequently than one might realize. For instance: I could recite many more instances where light bulbs are being used for heat sources all over the world, but the point is: the incandescent bulb is going to be missed by everyone who ever used them for their “heat” value, rather than their “light” value. So, here is an idea for a new business. Design and build (or license) a small “micro-heater” to replace incandescent light bulbs wherever they are (were) used as a heat source. Probably something that produces 5 watts to, say, 300 watts of heat—well below the 800 watts to 1,500 watts produced by today’s portable electric heaters. These micro-heaters could either be plugged into a wall outlet, or screwed into a light socket. Sounds crazy? Well, many people thought the invention of the transistor would be the demise of the vacuum tube, but just Google “vacuum tubes” today and see what your results are. Bright idea…or a fool’s folly? Only time will tell—if anyone out there is innovative enough to try it. Any other bright ideas for a new business? *
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