The Mheda Journal

I read an interesting article today. According to a survey performed by Brother International Corporation, the office equipment manufacturer, 47 percent of small business owners said they were willing to spend money rather than stockpile cash. Only 36 percent said the same thing last year.

I first took this as a good sign, thinking that must be a signal that people aren’t being as cautious with their money. However, I’m not so sure that this is in fact an indicator that the burden of the recession is easing. The same article says, “Small business owners are experiencing stress levels relatively unchanged from a year ago, with more than half indicating their worry is higher than usual.” So if they’re still worried about recessionary pressures, why the difference. Particularly with unrest in the Middle East and Northern Africa inflating gas and diesel prices domestically, why the rosier spending forecast?

Unfortunately, this particular article doesn’t answer that question (nor does it say what industries the respondents came from). But I’m curious what those of you out there, who are much more experienced as a business owner than I am, think of this. Is it a function of hording cash for a while and they can’t hold out any longer? Something deeper at play? Any comments or feedback would be appreciated.

The Small Business Jobs Act was signed into law on Monday, September 27, by Barack Obama. The new legislation could have an impact on many MHEDA members, seeing as how a high percentage of association members qualify as small businesses. One main feature of the Act is $30 billion in lending plus tax breaks for small businesses, but as one of my colleagues stated, “it is called the Jobs Act, not the Loan Act.” So what impact will it have?

The target is to create 500,000 new jobs, which it hopes to achieve through greater access to credit for small businesses, tax cut incentives for hiring and write-offs for purchasing equipment.

Now, I’m in favor of most any rule that benefits America’s small business. It’s too early to tell if this one will, in fact, benefit small business…and the Act has plenty of critics. For instance, Jade West, a lobbyist for the National Association of Wholesale-Distributors (NAW), of which MHEDA is a part, is quoted by the Associated Press as saying, “Business doesn’t need credit. Business needs customers. If they don’t have a customer base because demand is down, they’re not going to borrow because there is nothing for them to borrow for.”

Proponents, on the other hand, say things similar to what Representative Kathy Dahlkemper (D-PA) said in the same article. “More capital for business means they can expand and create new jobs. Helping businesses grow is essential to our economic recovery and getting people back to work.”

Obviously, only time will tell which side prevails. But I’m not a business owner, so I’d like to know what MHEDA members think. Will the Small Business Jobs Act work?

I ran across this little nugget today while researching our wikiMHEDA headlines. With all the talk still circulating the industry about green technology, I found it interesting.

A company in Buffalo, NY, specializes in eco-friendly products, like turning scrap tires and computer parts into item like wheel stops and sign posts. They have turned their attention to recycling old industrial conveyor belts made of rubber. According to the blog post in Buffalo Business First, “We don’t want to have any waste or have effect on the environment so were taking scrap and making it into different products. We’re going to take old conveyor belts from quarries and mines and cut them out and we have a customer in Texas who makes them into dock bumpers.” The quote is from Deborah Robbins, VP of Rubberform Recycled Products. They expect the process to start as early as next week.

As you’re all aware by now, the theme for MHEDA in 2010 is The Rules Have Changed. This is another example of small business ingenuity at work. If you or your customers have any old conveyor belts lying around, maybe it can return to another customer’s factory as a dock bumper. Full-circle material handling!

Have a great Memorial Day weekend, everyone!

With all the uncertainty out there among small business owners, they can take some solace in the fact that, at least for this week, Washington’s eyes are focused on them. May 23-29, 2010, has been proclaimed National Small Business Week by President Barack Obama and the Small Business Administration (SBA).

The events surrounding National Small Business Week, being held at the Mandarin Oriental Hotel in Washington, D.C., include roundtable discussions, executive forums, speakers and award presentations, including the announcement of the National Small Business Person of the Year.

“America’s small businesses are proving their resiliency as they continue to drive economic growth and job creation,” says SBA Administrator Karen Mills. “During National Small Business Week, we’ll honor the spirit of entrepreneurship, innovation and determination that makes small businesses the engine of our economy.”

In making the official proclamation, President Obama said, “Small business owners embody the spirit of entrepreneurship and strong work ethic that lie at the heart of the American dream. They are the backbone of our nation’s economy, they employ tens of millions of workers and, in the past 15 years, they have created the majority of new private sector jobs. During Small Business Week, we reaffirm our support for America’s small businesses and celebrate the proud tradition of private enterprise they represent.” Read more here.

This marks the 47^th annual National Small Business Week celebration. For more information, visit www.nationalsmallbusinessweek.com. The site will have live webcasts of all the related events throughout the week.

Enjoy the spotlight, small business owners. I hope it translates into some growth in your bottom lines!!

While surfing the Internet this morning looking for any breaking industry news, I came across an interesting story. While only tangentially related to the industry through the use of RFID tags, it did strike me as a great way for a small business to differentiate itself from the competition. The theme of MHEDA’s recent Convention was “The Rules Have Changed,” and Izzy’s Ice Cream shop in St. Paul, MN, has taken that mantra to heart.

An article in Computerworld magazine outlines Izzy’s new strategy for keeping the customers informed of flavor options. Apparently, one of the biggest customer service issues a shop like Izzy’s has is that customers don’t know what flavors are available until they get to the front of the line. Shop owners Jeff Sommers and Laura Hammel took care of that.

Izzy’s began using RFID technology to give customers real-time updates on the flavors it is offering each day. The store offers nearly 100 flavors, but only serves 32 on any given day. RFID readers in the dipping cabinets—the glass case where the ice cream tubs are housed—scan tags attached to the signs that label each tub to give customers updated information on available flavors. Every time a tub is replaced, an Izzy’s employee changes the RFID tag with one corresponding to the new flavor. The readers scan the tags 22 times every second and sends the information to a systems that projects the different flavors onto a wall in the store.

The information is also displayed on the store’s website, giving customers up-to-the-second information on whether their favorite flavor is available. 

Now that’s innovative! And just in time for summer!

Upon returning from the MHEDA Convention, I was of course overwhelmed by the amount of e-mail in my inbox. I had responded to the urgent messages and messages from actual people while I was gone, but that still left the mountains of newsletters and promotional items to sift through. Most of them I simply gave a cursory look to before deleting, but there was one that I thought deserved special mention.

Having the opportunity to work with and on behalf MHEDA’s membership, I spend a lot of time talking to small business owners. I’ve come to admire, particularly in the past couple of years, the dedication and courage it takes to be out there in the trenches, fighting the good fight. That’s why one particular press release, from the National Federation of Independent Business (NFIB), a small business watchdog group based in Washington, D.C., caught my attention. The article below was written by NFIB President Dan Danner and is used with permission:

“Why America Admires Small Business

It’s conventional wisdom these days: Many people are frustrated, even angry, with government and other major sectors of society. New research from the Pew Research Center confirms this thinking. In a recent survey, the group asked Americans whether they thought 13 different institutions and sectors had a positive or negative effect on the way things are going.

At the bottom of the list are large corporations (64 percent said negative), the federal government (65 percent), Congress (65 percent) and banks and financial institutions (69 percent negative).

So who’s on top? Small businesses.

Seventy-one percent of Americans say small businesses have a positive effect on the way things are going in this country. And when you look at the total picture of what small businesses do every day, it’s easy to understand why Americans feel the way they do.

Of course, small business owners start and build businesses, creating most of this country’s new jobs along the way, providing employment for millions of workers. And they support other businesses from which they buy goods and services, including, for example, the advertising that supports the media outlet where you’re reading this.

But small business owners are also frequently the lifeblood of the communities in which they live and work. Consider these facts from National Federation of Independent Business’ Research Foundation: 

• Ninety-one percent of small business owners contribute to their community through volunteering, in-kind contributions, and/or direct cash donations.
• The estimated average value of contributions is $6,600 per small employer, for a total of roughly $40 billion.
• Seventy-four percent volunteer the equivalent of 18 working days per year for community and charitable activities.

 Those contributions of time and money support a wide variety of groups, including schools, civic organizations, community groups such as Lions and Rotary clubs, youth sports and athletic teams, and many other organizations that help to make up a community.

Why do they do it? The most important reason, they said, is “personal satisfaction and fulfillment.” The least important reason was because they expected any kind of direct business benefits.

Small business owners also said that creating a better business climate and making the community a better place to live were important reasons to contribute.

So here’s the Pew survey’s real message to government, policymakers and others: If you want to turn around the public’s negative view of you, you’d do best to promote the policies and practices that support small businesses. We’ll be a better country for it.”

Couldn’t have said it better myself. Thanks, small businesspeople!

During the course of working on this issue (April) of The MHEDA Journal, a common element that kept coming up was the importance of customer service. To be sure, customer service has always been a hot topic of conversation among MHEDA members. They know the value of the service they provide and its importance in separating themselves from the competition.

As MHEDA focuses on how “The Rules Have Changed” during their 2010 Convention, it’s interesting that quality customer service is one thing that isn’t changing. Time and again, MHEDA members are telling me that “we’ll still provide the same service” or “servicing the customer is more important than ever” or “they’re not buying, so it’s important to focus on servicing what they’ve already got.” Comments like these have been common during our 2010 Industry Forecast and since.

As one distributor says in repsonse to the question of whether the explosion of Internet selling is bad for distributor relationships, “We are not burying our heads in the sand and are using the internet more and more frequently to market our goods and services. contracts will be tested, but customer service disappears with low margins and value can still be sold.”

Today I received a newsletter from a consultant who bemoaned the state of customer service from his newspaper delivery person: “I haven’t seen my paper on my porch in years.” Fixing that is a small step in fixing the newspaper industry’s struggles in general, he argues.

It’s a lesser example, but I keep seeing it all around. The more things change, the more they stay the same.

The theme for the MHEDA Convention (being held May 1-5, 2010, in Marco Island, Florida) is “The Rules Have Changed.” Basically what that means is, the recession that has impacted the industry over the last two-plus years has made certain “rules” of business obsolete and created a “new normal.” For example, a new rule of business might include “embracing social media because it’s an inexpensive form of marketing your company.”

For the second quarter issue of the magazine, I am looking for examples like this from distributors. What traditional rules of business are you breaking at your company to survive the recession? What new “rules” are you implementing? Leave a comment to let me know what you come up with!

Earlier this week, the Small Business & Entrepreneurship Council (SBE Council) released its 14^th annual Small Business Survival Index, rankings of each U.S. state according to their public policy climates for small business and entrepreneurship. South Dakota was named the most friendly state for small business and entrepreneurship, while New Jersey and the District of Columbia were the lowest-ranked.

The study’s author, Raymond J. Keating, says, “The Small Business Survival Index helps business owners and investors understand the public policy burdens placed on entrepreneurship and small business. These measures should matter to everyone because small businesses drive innovation, economic growth and job creation.”

The study accounts for factors such as taxes, regulatory costs, government spending, health care and energy costs, property rights, and more—36 such measures in all.  

The full report, “The Small Business Survival Index 2009: Ranking the Policy Environment for Entrepreneurship Across the Nation,” is available at http://www.sbecouncil.org. Read the SBE Council’s press release announcing the study for more details. The analysis also includes a cool interactive map. Green states are the top-ranked states, blue states are the middle-ranked states, and red states are the lowest-ranked.

MHEDA members in each state are probably aware of where they stand, but I think it’s interesting to see how each state compares to another.  I will be curious to see if, as the nation enters economic recovery, these rankings are an indicator of how recovery will occur. Is it correlated? Is it even relevant? Time will tell…but I found it interesting nonetheless.

On November 21, the employment-related portion of the Genetic Information Nondiscrimination Act will go into effect for businesses. (The healthcare-related part went into effect in May). GINA is intended to protect Americans against discrimination based on their genetic information when it comes to health insurance and employment. The act requires covered entities to obtain and post notices informing covered individuals of their rights under the law.

What does that mean? Good question. According to genome.gov:

GINA, together with already existing nondiscrimination provisions of the Health Insurance Portability and Accountability Act, generally prohibits health insurers or health plan administrators from requesting or requiring genetic information of an individual or the individual’s family members, or using it for decisions regarding coverage, rates, or preexisting conditions. The law also prohibits most employers from using genetic information for hiring, firing, or promotion decisions, and for any decisions regarding terms of employment.

This information is not particular to material handling, but it will affect business owners of all sizes. More information can be found at http://www.genome.gov/24519851.