On-Line Shopping Hits Record High

On-line shopping, which is a marketplace where more and more entrepreneurs are finding their footing these days, had a robust start to the Christmas season over Thanksgiving as reported at Inc.com. Traffic was particularly strong on Thanksgiving Day (cyberspace knows no Holidays….).
“Shopping and classifieds websites claimed 11.39% of all U.S. visits this Thanksgiving, according to online information service Hitwise, breaking the 2003 high of 8.96% also set on Thanksgiving Day. For the first time, Hitwise said, U.S. visits to retail websites exceeded 10% of total Internet traffic, accounting for 11.39, 11.03 and 10.74%, respectively, on Nov. 25, 26 and 27 of this year.”
Then on this past Monday, on-line sales continued to be hotter than ever. Red Herring reported that Internet sales for this day were up 30% from the previous year.
“Dubbed Blue Monday for the color of the hyperlinks that deliver online shoppers to e-tailers, the first Monday after Thanksgiving has emerged as the counterpart to Black Friday – the day following Thanksgiving when retailers bring their books from the red into the black in the first flurry of holiday shopping.
“Experts say the Monday after Thanksgiving is a popular online shopping day because workers trudging back into the office are lured to shop by the prevalence of high-speed Internet access in the workplace. This year’s Blue Monday sales figures beat the expectations of Graham Mudd, senior analyst at comScore, who had expected a surge of 23 to 26 percent growth in year-over-year sales.”
Just as traditional labor statistics do not measure our new economic reality, beware of reports that only look at consumer spending in retail stores, as Internet retail shopping has now become a significant part of the equation and is created new patterns of consumer behavior.

Entertainment Entrepreneurs Seek Positive Contributions to Pop Culture

Several entrepreneurs are finding success in giving many families what they want: entertainment with positive messages. StartupJournal highlights several companies that offer either positive contributions to pop culture or filters to clean up content that is less than family rated.
“‘The market was telling us that if parents could buy products and be 100% guaranteed that they weren’t going to be surprised with the content, they’d be very interested,’ says Rich Siporin, vice president of sales and marketing of Langhorne, Pa.-based eGames.”
For someone who lives in an entertainment town, this comes as good news, indeed. But, the common wisdom is that such G-rated content will not sell. So what is eGames experience in this market niche?
“In fiscal 2004, ended June 30, eGames’ sales rose 11% to $8 million, and profit increased 9%, to $1.7 million, from a year earlier.”

Importance of Planning for Family Businesses

The world of family business is full of examples of poor planning for succession or the sudden loss of the founding entrepreneur throwing the business into chaos. We recently saw a young and successful Nashville entrepreneur die suddenly at the age of 48. Although a tragic event for the family, this article in the Tennessean reports that they were fortunate to have plans in place to address succession in the business.
“Even when it was in its infancy, Bill Coakley operated SMS Holdings Corp. so it could operate without him….A little less than a month after being shocked by Coakley’s death from a heart attack at age 48, SMS is now relying on such planning and foresight as the company, a group of four businesses with more than 10,000 employees and $200 million in annual revenues, must move on without its founder.
“Within days of his death in late October, the company appointed Keith Wolken, Coakley’s brother-in-law and SMS chief operating officer, as its new chief executive officer. Meanwhile, the company is relying on the decentralized management structure created by Coakley to ensure customers know that business remains on track at the company.”
As I told the reporter in an interview for this article, “I can’t tell you how many wives and widows who’ve been put in a bad situation, where it can lead to a distressed sale of the company.”

Happy Thanksgiving!

I hope all of you have a Happy and Safe Thanksgiving. I will be spending the next few days with my family and will return on November 29th. Until then, here is the original Thanksgiving Proclamation:
“Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor; and Whereas both Houses of Congress have, by their joint committee, requested me to recommend to the people of the United States a day of public thanksgiving and prayer, to be observed by acknowledging with grateful hearts the many and signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness:
“Now, therefore, I do recommend and assign Thursday, the 26th day of November next, to be devoted by the people of these States to the service of that great and glorious Being who is the beneficent author of all the good that was, that is, or that will be; that we may then all unite in rendering unto Him our sincere and humble thanks for His kind care and protection of the people of this country previous to their becoming a nation; for the signal and manifold mercies and the favorable interpositions of His providence in the course and conclusion of the late war; for the great degree of tranquility, union, and plenty which we have since enjoyed; for the peaceable and rational manner in which we have been enable to establish constitutions of government for our safety and happiness, and particularly the national one now lately instituted for the civil and religious liberty with which we are blessed, and the means we have of acquiring and diffusing useful knowledge; and, in general, for all the great and various favors which He has been pleased to confer upon us.
“And also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech Him to pardon our national and other transgressions; to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually; to render our National Government a blessing to all the people by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed; to protect and guide all sovereigns and nations (especially such as have shown kindness to us), and to bless them with good governments, peace, and concord; to promote the knowledge and practice of true religion and virtue, and the increase of science among them and us; and, generally to grant unto all mankind such a degree of temporal prosperity as He alone knows to be best.
“Given under my hand, at the city of New York, the 3rd day of October, A.D. 1789.”
George Washington

Another New Banking Law for Small Business to Plan For

Just when small businesses are getting used to the changes created by “Check 21,” another law is going into effect that may also change the way they take payments as reported today at Inc.com.
“Beginning in January, the Fair and Accurate Credit Transactions Act (FACT) will limit what information can be printed on any electronic credit or debit card receipt. FACT forbids card expiration dates from appearing on receipts and mandates that no more than the last five digits of a credit or debit card number be listed on any electronic receipt.”
Although the law goes into effect on 1/1/05, there is a grace period to make any changes in credit card equipment until 12/31/06. After that, the penalties could be significant if you are not in compliance.
“To enforce the new law, the Federal Trade Commission is empowered to issue fines and prosecute businesses for noncompliance under the Fair Credit Reporting Act, which also holds businesses liable for consumer losses resulting from failure to comply with FACT, opening the door to civil lawsuits filed by defrauded consumers.”

Dancing Under the Feet of Dinosaurs

Anita Campbell at Small Business Trends has a post on a Business Week article about the recent growth of small retailers. Part of this trend relates to the growth in niche businesses succeeding on the Internet.
“That may seem to go against the grain of the ‘experience shoppers.’ But not really, when you think about it. Good Internet sites tend to offer a much larger selection. And the convenience of shopping from your PC without having to fight the crowds sounds downright inviting.”
But, part of this trend can also be traced to the consistent trend we see in many industries during times of consolidation and market concentration. When huge companies build market share, the little niche markets get ignored. That can create opportunities in what seems like impossible markets. I blogged about this recently about the banking industry. In retailing the myth is that Wal-Mart makes retail start-ups doomed. This is just not true.
Small businesses can find wonderfully productive niches by learning how be like the early mammals and dance under the feet of dinosaurs.

Small Business Has Strong Q3 in 2004

From the Office of Advocacy of the SBA:
“Economic conditions for small business continued to improve in the third quarter of 2004 according to the recently released Quarterly Indicators: The Economy And Small Business. The report, issued by the Office of Advocacy, shows real gross domestic product (GDP) up 3.7 percent, the twelfth consecutive quarterly increase.”
“This third in a new series of quarterly reports uses a variety of sources to track current economic conditions for small business. A number of indicators are showing signs of positive change. Between the third quarters of 2003 and 2004, industrial production, real gross private fixed investment, and real exports all increased substantially. Growth in each indicator was up from the growth over the same period in 2002-2003.”
“Over the first three quarters of the year, the net percentage of small business owners planning to expand employment was at its highest annual level since 2000, at 14.7 percent-meaning that 14.7 percent more owners plan to hire than plan to cut back on employment. The unemployment rate fell to 5.4 percent in September, its lowest level since October 2001.”
The full report can be found here.

Rural Entrepreneurship

Entrepreneurship is flourishing in rural parts of the US as reported at the National Dialogue on Entrepreneurship.
“Economists at the Federal Reserve Bank of Kansas City have been working for some time to develop new ways to track rural entrepreneurship activity. A recent article in The Main Street Economist, by Kansas City Fed researcher Sarah Low, summarizes some of this work. Low argues that understanding regional entrepreneurial activity requires that we measure both the breadth and depth of entrepreneurial activity. Breadth is measured by a region’s ratio of self-employment to total employment; depth can be measured by both average self-employed income and the ratio of self-employed income to receipts. Low further notes that rural America typically has high breadth and low depth of entrepreneurship. In other words, rural regions have many entrepreneurs, but they are not as engaged in high-value-added activities as their urban counterparts.”
What would be interesting is to apply this same approach to all markets. This might help support the premise that the household employment figures are better measures of the real state of the economy right now. It seems that we have a burst of entrepreneurship even in urban markets that Low’s measure of breadth might better assess than our traditional measures of employment and entrepreneurial activity.
The full report of the Kansas City Federal Reserve Bank can be found here.