Small Town Sends Library to the Private Sector

Privatization of governmental programs has provided more effective and lower cost alternatives in services such as garbage collection, health care and prisons. The latest government program to turn to the private sector for better service at a lower cost is public libraries. Here in Tennessee, Germantown has followed such a strategy as reported in the Germantown News Online.
“The County, faced with severe money problems dating back several years, has decided to phase out its annual $5.6 million contribution to the Public Library and Information Center. In response, Germantown hired Library Systems and Services (LSSI), a Maryland-based firm, to run the branch at Farmington and Exeter….Germantown officials determined that hiring LSSI – which will cost about $1.1 million annually ($1.3 million for overall library operations as a City department) – would be cheaper than paying $1.5 million per year to stay in the county system. Also, services will be increased – including new Sunday hours, an expanded collection and a closer relationship with local schools. In contrast, the County was planning to reduce services.”
Having been part of the wave of privatization in public health care in a past venture, I can say that some of these initiatives only take things half way or do not pursue these strategies with pure intentions.
In some cases, they keep large bureaucracies in place to “oversee” the private firms they contact with. This tends to minimize the cost reduction that could be created and constrain innovation. I have seen some privatization efforts clearly be set up to fail by disgruntled governmental employees who set up a system of oppressive micro-management.
Some privatization initiatives merely take the inefficient and ineffective systems already in place and make them a private entity. In addition to the obvious “feathering of nests” by contracting with former governmental employees, no real innovative changes will likely take place to save money or improve service.
The initiative in Germantown appears to be one that is not falling into these traps. While they do have oversight (which any contract should have), it looks to be of a reasonable scale. They are also letting the private firm improve services and use their existing systems.
Thanks to Ben Cunningham for passing this article along.

e-Bay and Small Business

Anita Campbell writes about the impact e-Bay is having on small business at Small Business Trends. This same trend was featured in a three part series written by Gerry Blackwell. Part I looks at operating an e-Bay store. Part II examines how to do it right and not get scammed, which is a real but preventable problem. Part III explores how e-Bay can save money for small business serving as a source to find vendors for supplies, equipment and even inventory.
Belmont’s own student run business, reverb media, bought all of their equipment and furnishings and inventory through e-Bay, saving thousands of dollars.
This is really just the first wave of what is a transition in how goods and services will be bought and sold in the future. Who knows how far this technological shift will take us, especially as we have the much anticipated convergence of electronic devices. Soon, everything from your fridge to your bathroom mirror will be integrated through an information network that will include computing, web-connectivity, television, and other media.
I believe that in thirty years we (hopefully I’ll still be around to be part of this “we”) will look back on the e-Bay era like we now look back at the revolutionary impact that Ford Motor Company had on our economy and society. The information age has been at work for a long time, but innovations like e-Bay are what really will take its power to the masses.
In the short run, tools like e-Bay are part of the fuel for this entrepreneurial economic boom, facilitating quicker and cheaper start-up strategies for many small businesses. It is creating new opportunities that did not exist just a couple of years ago.

Got a Good Idea?

There is a new service available for those of you with business ideas at TJ’s Weblog.
“The ‘Business Plan Surgery’ is designed to give expert feedback for your very own business idea – for free.
Here is how it works:
* You are a early stage company in the process of finalizing your business plan or looking for investment or you are already in business for less than 6 months.
* You may send in your business plan to us and get a review from our experts….We will focus on the viability of the business model and the biggest challenges for your business from our point of view.
* We guarantee you full confidentiality….What we want to do however is to inaugurate the TOP 5 after August 31st. For this inauguration we would like to present the abstract buy topamax from canada business model (2-3 sentences) to our blog audience.
* What is your benefit? First of all you get an expert opinion on your business plan which in turn reduces your risk. Additionally our weblogs are read by a wide range of technology experts, business angels and some VCs. So with some luck our nomination will bring in investment.
* What does it cost? Nothing.
* Isn’t it risky to give my “secret idea” to other people? – Not really as Seth Godin would say “…an idea needs light and oxygen much like a plant” to survive. You should feed it, ideas in the dark basement will most likely die.
* What do I have to do? Please send your executive summary to my mail adress mail@tjacobi.com and we take it from there.”

Marketing for Entrepreneurs: The Old and the New

Entrepreneur.com has two articles at their on-line magazine on marketing. One deals with techniques to optimize the latest in web-based sales. The other stresses that we should never stray too far from time tested sales techniques.
“Setting Sale” by Chris Penttila walks us through the five basics of building sales in a business. For Penttila’s take on these five I recommend you take a careful look at his article. Here are my takes on these five sales fundamentals:
1. Make sales contacts more effective. This is true from every aspect of sales from advertising to direct selling. It all costs money, which is generally a scarce resource for most entrepreneurs, so make sure your efforts have maximum impact on getting orders in the door.
2. Increase market share. In a competitive market, remember that most of your sales come from competitors. Know how customers make their decisions on who to buy from, know how well each competitor stacks up on these criteria, and know what you need to do better to take these customers away. Most of us think we know how our customers make decisions. Do some simple research to make sure you really know. It is often quite surprising.
3. Increase customer loyalty. It is easier and cheaper to keep a customer you have than to chase a new one. Don’t just worry about getting more folks “in the front door”, make sure you “close the back door” so you don’t lose the ones you already have.
4. Increase margins. The real goal is profits, not sales.
5. Reduce sales cycle. Know your sales cycle (first contact through closing the sale). Measure you progress along the sales cycle, as this is probably the only measure you will have of where you are headed (financial statements only look backwards). Make sure your accounting system gives you this information consistently.
And now for the new. Catherine Seda gives advice on how to increase sales through more effective use of Internet search engines in her article “In the Click”. It has gotten much more complex, so you may need to get professional help to make the Internet work for your business. Here are a few tips from Seda’s article on to get effective help:
-Find the experts. Read articles and books, and attend conferences to identify the companies with strong industry visibility. Even if they’re not good matches for you, they could recommend other reputable firms.
-Interview firms. Don’t be afraid to quiz companies about their marketing philosophies, process, tools, reporting and results. Ask them to define spam, then refer to your resources to see if experts agree or disagree.
-Avoid responding to e-mail spam. The “Get a number-one position for $99” spam is likely from companies that will spam the search engines, too.
-Speak to client references. Ask them to describe their experiences, results and recommendations for working with the company you’re interviewing.
-Outsource. Some companies manage their own paid placement campaigns in-house while other companies manage SEO. Find out what your options are.

Would You Like Fries With That Throat Culture?

It is amazing to watch markets at work. The health care industry (where I used to hang my hat as an entrepreneur) has been the source of much hand-wringing the past several years due to dramatically increasing costs. Unfortunately, politicians on both sides have been drifting toward the old familiar cries of “Let the Government Save You!” or worse yet, “National Health Care!!”, just as we heard in the 1990s.
Both in the 1990s and today we have seen the power of the market. In the 1990s we saw entrepreneurs create all kinds of amazing solutions that not only made health care more efficient, but most often more effective as well.
Here is today’s latest marvel of the marketplace: health care kiosks. It is a fast, efficient mini-clinic that specializes in common health problems. These kiosks operate out of Target and other retail stores. People were “sick” of sitting and waiting for hours in doctors’ offices, emergency rooms, or urgent care centers for simple health issues. These new clinics are popping up across the country. They go by the names such as MinuteClinic and Quick Care. They are being widely touted by health care plans due to their high patient satisfaction and moderate prices.
These companies reduce overhead through the application of the kiosk model from retailing. They keep their operating costs down by staffing with nurse practitioners, who are fully trained to provide care at this level. Because of their efficiency, health care plans are encouraging their use by offering lower co-pays (often as little as $5).
So next time some politician suggests the need for expanded government intervention into health care, tell ’em to go to a MinuteCare and get a chill pill.
(Thanks to Ben Cunningham for this suggestion).

State-by-State Employment Data

State-by-State Employment Data released today:
“Highlights:
* “Over the past year (since June 2003), the unemployment rate has fallen in 47 states and all 4 regions of the United States.
* “Non-farm payroll employment increased in 41 states in June.
* “Over the past year, employment has increased in 46 states.
* “37 states now have unemployment rates at or below the national unemployment rate of 5.6 percent.
* “The states with the largest payroll job gains during June were North Carolina (+35,400), Missouri (+27,600), Pennsylvania (+20,300), California (+12,300), South Carolina (+12,000), and Florida (+11,800).
“The latest state-by-state data are consistent with recent job growth nationwide. Since last August, over 1.5 million new payroll jobs have been created. Nearly 1.3 million new jobs have been created in 2004 alone. If the current pace of job growth for 2004 continues, over 2.5 million jobs will be created this year. In addition, the current national unemployment rate is 5.6 percent, well below its recent peak of 6.3 percent and below the average unemployment rates of the 1970s, 1980s, and 1990s.”
(Source: Joint Economic Committee).

Bad Bounces

I was watching more highlights of the British Open this morning on the Golf Channel, and I was struck by another lesson golf offers entrepreneurs. Even after all of the preparation and planning, sometimes the Open comes down to one or two unlucky bounces. The links courses are infamous for their quirky landscapes that create quite unpredictable outcomes from perfectly executed shots.
There is a certain randomness that we can never completely prepare for in golf, just as in business. I saw several well struck shots hit a mound just wrong and go in directions the players never imagined. The same is true in business. No matter how much we plan and no matter how much data we gather, random acts happen. We had a business that was providing vocational assessment and training for workman’s comp cases that was growing quite nicely until one day we woke up and found out that the state legislature had added language to a bill that basically took away most of our funding from workman’s comp insurance. It was a bad bounce from which we could not recover. Nobody saw it coming. It was as if we were playing our way around the course flawlessly, but on the final hole we caught a bounce that sent our ball out of bounds to cost us the championship.
Luckily for us, this was a small part of our total operation, but it taught us an important lesson. Although we could manage our risk by careful planning and solid execution, we could never eliminate the random outcomes that arise from uncertainty. Bad luck can happen at any time and without warning.
Depending how bad the bounce is, the golfer either plays on from where they are, or if the bounce is bad enough, knows that he will be able to play again tomorrow and hope that the golf gods will be kinder. A good lesson for entrepreneurs, too.