Wake up call for business owners -- big and small

Very interesting piece by financial columnist James Surowiecki, excerpted from The New Yorker:

ILLUSTRATION: CHRISTOPH NIEMANN 

(reposted with respect from The New Yorker)

"In the nineteen-eighties, a new kind of chain store came to dominate American shopping: the “category killer.” These stores killed off all competition in a category by stocking a near-endless variety of products at prices that small retailers couldn’t match. Across America, independent stores went out of business, and the suburban landscape became freckled with Toys R Us, CompUSA, and Home Depot superstores. 

But the category killers’ reign turned out to be more fragile than expected. In the past decade, CompUSA and Circuit City have disappeared. Toys R Us has struggled to stay afloat, and Barnes & Noble is in the midst of a boardroom battle prompted by financial woes. And, last month, Blockbuster finally admitted the inevitable and declared Chapter 11."

"The obvious reason for all this is the Internet; Blockbuster’s demise, for one, was inextricably linked to the success of Netflix. But this raises a deeper question: why didn’t the category killers colonize the Web the way they colonized suburbia? That was what pundits expected. Companies like Blockbuster, the argument went, had customer expertise, sophisticated inventory management, and strong brands. And, unlike the new Internet companies, they’d be able to offer customers both e-commerce and physical stores—“clicks and mortar. It seemed like the perfect combination..." (Read more http://www.newyorker.com/talk/financial/2010/10/18/101018ta_talk_surowiecki#ixzz12Alkr2YC)

While the demise of any business is not good news for a community, this turn of events does raise some good questions for small business owners.

What are *you* doing to prepare your small business for the ongoing technological shifts in the way our culture buys and sells?

Part of our mission here at the nonprofit South Carolina Small Business Chamber of Commerce is to help SC's small business community grow and maximize ROI.



Two simple action items for you:

1. Join our free BuySC online business directory at http://www.buysc.org!

2. Come to our next small business seminar!
 


BuySC Micro-Conference: 
5 Steps To Business Freedom with Keith Spiro

Wednesday, November 10
6:00pm - 8:00pm

Olympia Room, Second Floor of the 701 Whaley Building

701 Whaley Street

Columbia, SC, 29201

Price: Free for paying SCSBCC members / $5 Basic Members (free membership) /$10 for non-members. 

Become a member for free, and save $5!

Refreshments and hors d'oeuvres for the reception will be provided courtesy of our event sponsor: 

Mac's On Main!

Please register at www.buysc.eventbrite.com

 

To learn more about SCSBCC membership, please go to http://www.scsbc.org/membership

About the Lecture:

Why do 90% of businesses fail within the first 10 years?

* 78% lack a solid business plan
* 73% are being overly optimistic about sales
* 77% are not pricing their products or services properly
* 70% don't recognize or ignore their weaknesses and don't seek help

Turn those threats to your company into business freedom. Come learn concrete practical ways to steer clear and head toward freedom in your business.

About the SCSBCC:

The South Carolina Small Business Chamber of Commerce is a non-profit advocacy organization representing the general interests of small business.

For more information please go to www.scsbc.org, www.buysc.org or contact Stephanie Lombardo, Membership Coordinator at 803-252-5733 / Stephanie@scsbc.org

Workers’ Comp Rates to Drop Big

Where was that headline 11 days ago? 

On June 10^th, the S.C. Department of Insurance put out a media advisory saying that its Director, Scott Richardson, had approved an overall 9.8% decrease in worker’s compensation insurance rates (technically the cut was to something called “Loss Costs in the Voluntary Market” but I don’t want you to quit reading).

A 9.8% cut!!!!!!  In his economy this is great news for small business but I don’t know that any of our daily newspapers reported the story.

In 2005, a 32.9% hike in workers’ comp insurance was proposed, and in 2007, a 27.7% increase was put on the table.  Several South Carolina dailies reported these stories primarily because the big business organizations pushed the news as proof that reform was needed and claimant attorneys were driving up premiums.

“Blame the lawyers, not obscene insurance company profits,” they said.

But when it came time to fight these rate hikes in court, the big business organizations were nowhere to be found. 

Only The S.C. Small Business Chamber of Commerce and the State Consumer Advocate went before a judge to successfully fight the proposals.  Turned out that lawyers weren’t responsible for increased costs at all – and the judge dramatically reduced the proposed rate hikes to 18.7% (http://www.scsbc.org/view_press.asp?id=199) and 9.8% (http://www.scsbc.org/view_press.asp?id=256)  respectively.

So why did no reporter in the state pick up this very important, good news story about our businesses possibly saving big on future workers’ comp premiums?

Two reasons. 

First, there are far fewer reporters at our daily papers, as I pointed out in Monday’s blog.  This is especially true for pure business reporters.  The remaining ones simply don’t have the time to find and report every important story.  And, I hate to say this, but there might be no business reporter in South Carolina that knows enough about workers’ comp insurance to even understand how rates are determined.   I only found out about this 9.8% cut from Mike Whiteley of Workcompcentral.com in Texas.

Second, big business unfortunately sets the tone for what is a business story in this state and they had no interest in pushing this good news.  A cut in insurance rates doesn’t fit their tort reform story line.   “Only by cutting lawyers’ compensation can we ever reduce insurance premiums,” they scream year after year.   Ooops.

The reality is that while some reform in the civil justice system might be needed, it isn’t the lazy, ineffective kind of simply capping damage awards and lawyer compensation.  But that’s a story for another day.

Today’s message is this:

1. There are not enough hard news reporters at our dailies, and
2. There’s an undeserved big business special interest influence on reporters.

Both are keeping you from really being informed – and that’s not good news. 

The Mainstream Media's Epic Fail: Alvin Greene and the 2010 Primary

"I think the ultimate story that…should come out here is this is a major failure on the part of the media."  - Dan Cook, Editor, Free Times, Columbia SC, in radio interview on U Need 2 Know, WOIC (1230 AM,) June 17, 2010. 

Dan nailed it.  He was talking about the real story behind the Democratic U.S. Senate primary victory of Alvin Greene.  

Very few in the print media covered the contest the way that a U.S. Senate race deserves, until of course, it was too late to inform the electorate about the qualifications of Mr. Greene and his opponent Vic Rawl.  (My focus is on the print media because I hold them to a much higher standard for reporting the news.  Most electronic news is just ripping and reading what the print media has already reported or very shallow coverage dictated by the medium itself.  Bloggers might be the only exception.)

And depending on the results of the GOP Gubernatorial runoff, Dan’s comment might apply there also. 


Candidate Nikki Haley’s entire, long campaign has been about total transparency of a legislator’s voting record and income so that the public will know who they are really representing in the General Assembly. 


She garnered 49% of the Republican primary vote on that platform.

  "I knew her to be a connected person who had access to a lot of folks and information, and in my business, that sort of information is critical to get ahead." 
- Bob Ferrell, Wilbur Smith


Now only five days before the runoff she has been exposed as playing the same good ol’boy money games she has been sanctimoniously carping about.  Several years ago the Columbia engineering firm Wilbur Smith contracted with Representative Haley for one purpose only—information.  "I knew her to be a connected person who had access to a lot of folks and information, and in my business, that sort of information is critical to get ahead,” said Bob Ferrell of Wilbur Smith. (CNN’s “Political Ticker” Blog, 6/18/10)

Representative Haley wasn’t privy to this valuable information because of her family’s clothing business or her husband’s military service or her volunteer work for her church (whichever) or PTA.  The information she had was due solely to her serving in the South Carolina General Assembly.  Period.

Huffmon, courtesy ETV

John O’Connor, a print reporter with The State, finally broke the initial story on Representative Haley that has been hiding in plain view if anyone would have had the time to look for it earlier when it might have mattered to primary voters.

Scott Huffmon, political science professor at Winthrop University, agrees.  “This could have helped tarnish Nikki’s image three months ago, but not at this point.” 

I’m not criticizing our state’s print reporters.  There simply aren’t enough of them.   


Every daily in this state – heck, across the country – has cut their hard news staff to save money. 


Brent Nelsen, unsuccessful GOP primary candidate for S.C. Superintendant of Education, spotted this problem in his contest.  

“The media need to play a more active role in sorting through candidates," notes Nelsen. "The state’s financially strapped newspapers have cut back the number of reporters writing articles and opinion columns on politics.”

Most of the hard news reporters remaining hardly have time to look behind a press release to really understand the complexities of an issue.  Being able to do real investigative reporting is probably what most aspire to, but there is no time when your editor keeps handing you more and more story assignments to turn around by press time that day.

“The media need to play a more active role in sorting through candidates." - Brent Nelsen

Our reporters have simply been beat down, grateful to still have a job and looking for that one break that can help them escape a collapsing industry.

The consequences of all this are more than just Alvin Greene and Nikki Haley; the public is missing important stories on government and business every day.  In fact, I’ll share with you one of those stories in my next blog post here at UnConflicted.