Technology and Small Business

Anita poses an interesting question at Small Business Trends.

What is the most significant piece of technology to impact small businesses worldwide? The computer? The fax machine? Desktop software?

She votes for the mobile phone.
As I think about this question, it brings to mind what a Luddite I really am. New technology always intimidates me.
But, then I let my mind wander a bit and think of the question more in terms of technology as a way to do things rather than just the high-tech gadgets that we all seem to focus on today. Dictionary.com tells us that the word technology comes from Greek. Its root means the “systematic treatment of an art or craft.” So what do small business owners benefit most from that is a systematic application of their craft?
If we look at what differentiates successful entrepreneurs from the unsuccessful ones, the most important craft is opportunity recognition. This is a process that we have learned how to systematize and teach to entrepreneurs.
Entrepreneurs who have the most success are those who are able to find a real niche in the market that offers enough of a margin to meet their needs and aspirations. Successful entrepreneurs understand the importance of “failing on paper.” They carefully assess their idea to make certain that it has an adequate market and enough profit margin before they ever launch their venture.
As more and more entrepreneurs are being trained worldwide, it is this one skill, this one technology, that is having the biggest impact on their success.
So I respectfully suggest that the most important technology is not a gadget, but a process that has become systematized and taught to more and more aspiring entrepreneurs. Gadgets are nice, but they come and go and are really only marginally responsible for business success.

A Wisconsin Boy’s Dream Come True

From the StartupJournwal:

Matthew Younkle was a senior at the University of Wisconsin in Madison when inspiration struck. What the world really needs, he decided, is a three-second beer.

He was not the first college student to dream of ways to get to his alcohol more quickly. What set Mr. Younkle apart is that he chose, soberly, to follow through.

Ten years later, Mr. Younkle, 31 years old, is president and chief technology officer of TurboTap, a company marketing a finger-sized nozzle that attaches to standard beer faucets and pours draft beer at least twice as fast as traditional systems do, and with less spillage.

From one Cheesehead to another I say, “Good job der hey!”

iPod Creates a New Industry

While the iPod was not the product of an entrepreneurial company, it has helped to spawn a whole industry for entrepreneurs looking to create new products around the huge demand for this new technology.
From Yahoo News:

One company, Delarew Designs, is offering a line of handbags that sport built-in iPod pockets and holes on the ends for the music player’s headphone wires.
Another, Bluelounge, has created the Cableyoyo, an inexpensive cable caddy, which literally rounds up wires and stores them out of the way.
Still others are marketing different types of protective coverings for the music player.

These are just a few of the great examples of how entrepreneurs do not have to be the creator of a break-through technology like iPod to take advantage of the market that it creates.
(Thanks to Annie Whiting for passing this along).

Economy Looking Robust

The Congressional Joint Economic Committee has released some impressive economic statistics:
– Payroll employment rose by 146,000 in June, and the unemployment rate edged down to 5.0%, the lowest since September 2001.
– GDP growth was 3.8% in the 1st quarter, matching growth of the 4th quarter. Forecasters see a continuation of healthy growth.
– Year-over-year Inflation in the “core” consumer price index, which excludes volatile energy and food prices, moderated to 2.2% in May.
– Markets expect the Fed to continue to raise its target overnight interest rate, which it has raised from 1.00% in late June 2004 to the current 3.25% in a sequence of nine quarter-point increases.
– The deficit is smaller than previously projected.

Is Universal Health in the Best Interest of Small Business?

Government mandated universal health care proposals are back in the news in the US. In an article at Inc.com, they make is sound like a good thing for small business.

Currently, bills have been introduced in 18 state legislatures calling for a universal health care plan. Small business owners who provide health insurance plans to their employees are paying particular attention to the debate, as a universal health-care system could help alleviate some of the rising costs employer-sponsored plans are facing.

Based on what data? Government mandated programs of any kind are a slippery slope. Passing a simple mandate that requires only basic coverage may save some small businesses money by not requiring rich benefits. But once in place, the lobbyists for this and that get to work and the plan requirements grow and grow along with the costs.
They also try to pull a shell game on workers to make it look like it is the business owner who has to pay and not them. But this is wrong. Small business owners have only so much money to pay employees. If there are more benefits mandated that will shrink the pot of funds available for salary. While the employees think it is a free benefit, it is merely an illusion as it comes out of the same finite amount of money.

Missouri Strengthens Regulatory Flexibility

Small businesses in Missouri have new protections against overly burdensome proposed regulations thanks to a bill signed into law today by Governor Matt Blunt. The new law strengthens Missouri’s current regulatory flexibility laws by providing small businesses with judicial review of agency compliance with rulemaking procedures. It also requires agencies to periodically review existing regulations that affect small businesses to ensure that they are still necessary.
“Adding judicial review is an important step forward for our state’s small businesses,” said Scott George, president and CEO of Mid America Dental & Hearing Center in Mt. Vernon, MO. “Now the law has some teeth, and that will help small business and state agencies work together to produce good regulations that get the job done without causing serious harm. It means a better business and job creating climate for Missouri,” he said.
It is a shame that the logic of regulatory flexibility was not enough to assure it was implemented effectively in Missouri. Bringing the courts in is adding a worrisome step in the process.

Entrepreneurship in the East

The National Dialogue on Entrepreneurship seems, at times, to be rooting for the “rest of the world” when it comes to entrepreneurial economic development. This week they focus on the east.
First, they offer a provocative teaser for a briefing they have next week by the author of Three Billion New Capitalists: The Great Shift of Wealth and Power to the East, Clyde Prestowitz. (More on this in the next week or two).

While the United States is still commonly accepted as the world leader when it comes to entrepreneurial innovation, the emergence of market economies in China, India and other nations in the East may have already begun tipping the balance of economic – and geopolitical power – away from the U.S.

Perhaps, but those of us old enough to remember the economic forecasts of the 1970s and 1980s heard the same song and dance about Japan and their centrally controlled strategic plan for their economy. By creating such a plan Japan would soon dominate the world economy. Well, they found out, not unlike the Soviets, that centrally planned economies are doomed to burn-out while those fueled by market-based entrepreneurship continue to transform to meet changing needs and demands.
But, wait! NDE tells us this week not to count Japan out. They have discovered entrepreneurship!

According to the latest edition of the Japan Entrepreneur Report, a new e-zine covering new business activity in the country, Japan is poised for a boom in new entrepreneurial ventures. In the newsletter, Allen Miner of Sunbridge Corporation argues that the Japanese economy is now at a critical turning point. As the information technology industry moves away from general-purpose computers to digital consumer devices (like the iPod and specialized cell phones), Japanese businesses and innovators are well positioned to prosper. Japanese firms excel at design and at customer responsiveness. These traits will aid them in capturing new markets in coming years.

I guess the authors of this e-zine weren’t paying attention thirty years ago….
And watch out for New Zealand, “one of the world’s most entrepreneurial countries.” Except there is one problem, as pointed out by Inc this month. New Zealanders seem to be a little too laid back to create real entrepreneurial economic development. It seems to be a land of lifestyle entrepreneurs. But have no fear; the New Zealand government (with its strong socialistic roots) is planning to step in and save the day. All they need is a good old-fashioned government program to turn this situation around.
I know it disappoints many, but the US is still growing, innovating, and leading the world. What is the biggest risk to this? Not some government planned initiative from the east, but our own government creeping toward more and more restrictions on free enterprise.

A Frightening Reminder

The frightening events of yesterday in Great Britain should serve as a reminder of what can happen during a time of war. I have made many entries that highlight the importance for small businesses of being ready for the next time terrorists hit. As most experts reminded us yesterday, it is not a matter of if, but when. Here are a few of the points I have made in the past that any small business should keep in mind:
– Have a disaster plan in effect. Whether it be terrorism, hurricanes, earthquakes, or whatever, be prepared with a plan. It can make all the difference for you and your employees and for your business.
– Implement a security plan.
– Manage your cash, debt, inventory, and overhead carefully. Be flexible in all of this and have contingency plans ready.
Remember that entrepreneurs are the economic foot soldiers in this war, and it is a long term commitment. Remember the words of Winston Churchill, “You do your worst, and we will do our best.”