KEDM Broadcast - Marketing to Seniors

Americans are getting older. Since 2001, the number of people age 65 and older has increased by over 20%. Today over 43 million Americans are in that age group which is projected to grow to over 70 million people by the year 2030 accounting for about 20% of the population. For a business owner, this represents an enormous opportunity to carve out new markets to meet the unique needs and demands of a senior population.





With the growth in the older population segment, it is tempting to lump seniors into a single category. Because the common physiological effects of aging on sight, dexterity, sensory responses, and cognitive skills impact the older population as a whole, terms like “Baby Boomers” and the “Grey Market” use age to collectively categorize this population into a single segment. This simplistic approach fails to recognize the vast array of differences inherent in this group. While some people will opt to formally retire from the day-to-day rigors of the workplace, many others will continue to work into their 80s, some will pursue new business opportunities, others will teach, travel, and volunteer in their communities. From a business perspective, it is essential to understand this is not a single homogenous group, but rather a diverse population consisting of various niche markets. Opportunities for success within this population group are available, but not by doing business as usual.




Marketing your products to this group, which controls 70% of disposable income, demands an approach that embraces the lifestyles of this group and goes beyond the issues associated with aging. Seniors have been increasingly willing to adopt and adapt to new technologies. More than half of this age group is on Facebook where the average user is online over 8 hours each week. On average they watch 174 hours of television a month, 63 percent more than the 18-to-34 year-old generation. In 2011, the peak age of vehicle buyers shifted upward to 55-to-64 from 35-to-44, according to the University of Michigan Transportation Research Institute, and that trend is here to stay. It is also important to retreat from myths associated with aging. Consider this one: Older consumers buy the same brands they’ve always bought, so why bother catering to them? That is simply not true. Seniors today are looking for new experiences, and two-thirds of them plan to spend more time on hobbies and interests than they do today. In marketing-speak, they’re “winnable.” Another myth is they are cheap. A survey of 3,000 consumers over 60 by consulting firm A.T. Kearney found that they’re not particularly price-sensitive, even if their incomes are below average. Nielsen found that more than 40 percent of Apple Inc. products are bought by seniors. P&G learned that seniors are willing to splurge on expensive pet food. Although earlier generations of seniors were frugal, there are signs that this group of seniors is a group steeped in consumer culture.




Small businesses are uniquely poised to meet the growing demands of this new market. Typically free of large organizational bureaucracy, nimble small businesses can quickly modify products and adjust internal processes to meet the needs of smaller and often fragmented markets.




Change, in the guise of an aging population, is coming. We can help you get ready to meet that challenge. For over 30 years, we have worked with entrepreneurs and business owners who are looking to start or grow their small business. For no-cost assistance with your business needs call us to schedule an appointment at 342-1224 or visit us at www.lsbdc.org. Today’s thought from the Small Business Corner has been presented by the Louisiana Small Business Development Center at ULM.

KEDM Broadcast - Succession Planning

In the wake of devastating life events, the survival of a small business is at risk. Many small business owners have no strategy to respond to the needs which follow a divorce, a death, or a disabling event. No matter how unlikely you believe it is that you will go through one of these events, the impact could be disastrous for you, your family, your business, and everyone associated with it in the absence of a succession plan. A recent article by The Succession Planning Group offers the following guidance.




Based on recent data from the National Center for Health Statistics, Centers for Disease Control and Prevention, a marriage today has a 36% chance of ending in divorce. Unless you have a prenuptial agreement, in the event of a divorce, your spouse is probably entitled to at least a portion of your interest in the company; you may even have your ‘ex’ as a partner.




In a succession plan qualifications for ownership of the company can be spelled out including a resolution for each spouse. The plan can also spell out what would happen to the business in the event of a divorce of a partner and could stipulate the creation of a contingency fund that would provide the funds needed to buy out the interest of the spouse of the owner or a partner.




Regardless of how it happens, a disability can affect the ability of a business owner to continue to manage a business or to make the same level of contribution to the business. Every business owner or partner needs a plan to specify how a disability will affect ownership of the business, contribution to the business or exit from the business. The succession plan should address your future and the company’s future.




The disability portion of your succession plan will address many contingencies, but should include directions on:


• How the decision will be made about the merits of you leaving the business

• Funding disability insurance to pay for your future

• Funding to get the company through a transition

• Funding for partners to buy out your interest in the company according to a succession plan.




Death needs to be considered at every age. The issue that must be addressed in succession planning is what will happen to your business partners, the company and your family after your death. Even if you are young and the likelihood of your death is low, it is important to keep in mind that you have far more options and opportunity if you plan early. The older you are the more expensive life and disability insurance will be to purchase if it can be obtained at all.




Designate a successor for your role in the company and as part of a clear transition plan. Provide for incentives to keep key employees from leaving the company during a transition. Provide adequate cash reserves and insurance to allow your partner or successor to buy your share of the business from your heirs and to carry the business until your successor can demonstrate the stability of the company to lenders, vendors and customers.




Death, disability and divorce are the three things most business owners think of when a conversation about succession planning is begun. Unfortunately, however, only 10 to 20 percent of the business owners who need a succession plan actually have one. If you are one of those without a succession plan, don’t you think it’s time to do something? For over 30 years, we have worked with entrepreneurs and business owners who are looking to start or grow their small business. For no-cost assistance with your business needs call us to schedule an appointment at 342-1224 or visit us at www.lsbdc.org. Today’s thought from the Small Business Corner has been presented by the Louisiana Small Business Development Center at ULM.

KEDM Broadcast - Where's the Money

Where is the money?

“Where can I get money to start my business?”  That is one of the most commonly asked questions when aspiring business owners visit our offices.

Because one of the most common reasons for new business failure is the lack of working capital needed to keep the business operating until it develops a positive flow, it is an important question.

Invariably, the first thought turns toward availability of grants.  When considering a ‘for profit’ company, grant funding is almost nonexistent.  In some specific industries private foundations may offer some funding, but for the vast majority of business starts, the answer is “no grants”.  When considering a ‘not for profit’ organization, some small grants are available on a competitive basis.

The most common source of funding for a business is through more conventional lenders like banks and credit unions.   Many of the same factors lending institutions evaluate for a personal loan are considered with a business loan: borrower’s credit score, a collateral requirement, and the ability to repay the loan are part of the decision process.  It is important to note, not all banks lend on the same projects nor do they evaluate on the same criteria.  So, you may need to shop around to find a lender who will be the right match for what you’re planning.  Another important point to remember is lenders will not loan 100% of the funds needed for a new business and will expect the prospective owner to provide funds in some form such as cash, land, building, or equipment.

Another avenue to finance a new business is to enter into a partnership arrangement with an investor.  This arrangement often means the owner will sacrifice some authority over the business in exchange for funding and it is not the best option for everyone.  If this path is chosen, the rights and responsibilities of each partner should be written into a partnership agreement. This agreement spells out the terms of the relationship and can detail income distribution, ownership percentages, decision making rules, succession plans, and dispute resolution. Because this can be a complex document, we encourage entrepreneurs considering this to engage legal counsel experienced in writing this type of agreement.   

Family members and friends are another potential source of fund. Obtaining money from them may seem like an easy way to bypass some of the issues with traditional lending sources. However, funding in this way should be treated as a business transaction documented and supported by a loan agreement.  That agreement should detail the terms of repayment including due dates, payment amount, interest, and collateral if the loan is secured.  If the money is considered an investment in the business, then the same considerations we just discussed about taking on a partner would be relevant.   Writing down the details of any funding transactions from a family member will help ensure everyone involved understands the scope, purpose, and nature of the investment.  Here again, we encourage entrepreneurs to seek professional advice from someone experienced in this type of arrangement.

A relatively new option for financing is call crowd funding or crowd financing.  Much like the name suggests, the source of funds comes from smaller private individuals or “the crowd”.  These funds can be directly sourced from the public or through third party organizations.  Donor based funding, credit based funding, and equity based funding are examples of crowding funding types and each carries a unique set of risks. This is not for every situation, so, do the necessary research to see if this would work for your business.

Finally, in some cases, government agencies will lend funds or offer guarantees for loans.  Check with the respective agency to determine what is available under each program.

KEDM Broadcast - Environmental Scanning

Environmental Scanning

The demands of caring for the day-to-day needs of a small business can be life consuming.  Often small business owners are too busy working in their business and neglect an equally important task of working on their business.  Understanding the changing dynamics of the marketplace and strategically positioning your business to meet those changes is critical to the long-term success of your business.  

“Environmental scanning” or simply “scanning” is one common and effective technique to aid in understanding the changes that may impact your business.    Scanning, in a general sense, refers to the collection and evaluation of information, both inside and outside your company which may affect your future operations.  The process of scanning does not have to be a formal activity, but it should be undertaken on a regular basis to ensure some consistency in what information is observed.   

The scanning process consists of two distinctive analysis facets; one is internal and the other external.   Internal scanning, as the name suggests, looks inward to the business and is more familiar as a process to many small business owners evaluating the strengths and weaknesses of their organization.  Checking sales volumes, monitoring inventory levels, and tracking other key performance metrics are common examples where a changing trend should serve as an alert to the owner.   In a less pronounced way, a subtle change in tone during staff meetings, an increase in absenteeism, or a sudden increase in turnover could be a signal.

By contrast, external scanning is examining information outside the business and focuses on two key issues.  The first is what information should you look at and second how frequently you will look.  To minimize the amount of time dedicated to external scanning, identify the key sources of information you want to know.  At the most basic level, evaluate things about your customers, competitors, and suppliers.  Assess how they are changing and how that change can affect your business.  At a higher level consider the industry as a whole.  Identify and compare your company with key success factors or best practices within the industry.  Consider too the attractiveness and growth prospect for the industry. Finally, at a macro level, evaluate political and social changes, technological developments. While it is useful to gain a broad sense of understanding, it is more critical to use the information gleaned from scanning activity to assess the impact on your company.  We touched on how often to scan a bit earlier, but remember not all change occurs at the same pace.  Political changes tend to be more gradual while technological changes happen very quickly in certain industries.

In a way, much of what we’ve discussed suggests an informal approach to scanning.  Tools and techniques are readily available to aid in conducting formal, documented scanning activities.

Finding the time to perform this assessment while meeting the day-to-day needs of your business may be difficult.  During a previous segment on time management, we suggested making an appointment with yourself on a regular basis – keep that appointment and use that time to scan.

Successfully scanning the environment can position your company to remain competitive by anticipating and strategically responding to change.  In short, it can make you a stronger company.

KEDM Broadcast - Corporate Culture

Corporate Culture

Whether by default or intent, every business has a culture.   That culture is the essence of the company and is reflected by the shared values, beliefs, practices, stories, and symbols which guide its day to day operations.

For many new business starts, the culture is simply a reflection of the values of the individual owner.   However, as a business grows and hires new employees, the original and founding values of the owner may or may not mesh with the values of new staff.  In order to anchor the original values, it is critical for young businesses to establish a clear culture to shape the future of the business.

Beyond having culture to guide the business, research indicates companies with a strong culture significantly outperform those with less remarkable cultures.  While there are compelling arguments for creating a strong business culture, there is often confusion on how to do it.   Without any action on the part of the owner a culture will develop, so, the question is not one of creating a culture, but rather a question of creating a strong positive culture.

At the heart of a strong business culture is a vision or mission statement that articulates the guiding force behind the organization; its purpose for existing.  Next, articulate the values and communicate both the values and the vision for the business to all staff. Along with the vision, these values become the framework that will guide and shape future decision.  Working within the framework are people and hiring the right people is essential to making the values a permanent part of the culture.  No company can make this happen without people who either share the values or who are willing to change and be able to embrace them.  Not only can hiring the wrong people work against the values, it can have a negative impact on morale, productivity, and customer relationships.

Finally, understand the desired values must be embraced by everyone from the top of the organization to the bottom.  Values that serve as little more than window dressing will not be embraced by the employees.  A management team that looks to impose a vision on the workforce, but not embrace it themselves will see a culture evolve that reflects the reality of demonstrated values rather than the desired values.

Many companies create a strong corporate culture and make the values a real part of daily business practice.  A notable example of this is how Johnson and Johnson, the makers of Tylenol products, reacted to a tampering problem in the mid-1980s.  As you may recall, an individual laced Tylenol products with cyanide killing 7 people and creating an aura of panic about the product.  The Johnson and Johnson management ordered all Tylenol products be immediately removed from the shelves and destroyed.  Although a costly and seemingly drastic step, the company won praise for taking swift and decisive actions, used the event to improve product safety, and were rewarded as customers returned to purchase their products.    When asked about the rationale behind the decision, the management referred back to the company values expressed through their credo, which challenged them to put the needs and well-being of the people they served first, showing how deeply ingrained those values were in the company.

Is the culture in your small business working for you or against you?  Do you want to create a stronger and positive culture?  The time to start is now.

 

 

KEDM Broadcast - Prepare for the Unexpected

Prepare for the Unexpected

The recent push of Winter Storm Leon toward the Gulf of Mexico dumped ice and snow across much of the south and reminded small business owners in our region that hurricanes are not the only disaster for which they need to be prepared.   Decision making in a crisis rarely yields the most effective solutions.  So if the recent storm caught you unprepared, consider that while inconvenient and disruptive, serious weather events provide an excellent time to work on your emergency planning.

 

During a crisis communication is vital.  A company’s website and other social media channels are the face of the company to the world.  Even though the company may be closed, the Internet is still open.  It is important to use the available media channels to let the public know whether you are open or closed, if customers can expect delays in shipment, and how to contact the company for emergencies during the storm.  Don’t forget to update the company’s voicemail with a brief status of the business and whether or not voicemail will be checked.  

Communication with employees in a timely manner is not only critical to the operation of the business, but also sends signals to employees about their value to the business and the firm’s commitment to their safety.  This is an excellent opportunity to update contact information with all employees for future events.

Although many businesses close during a severe weather event, not everyone shuts down and goes home.  Check the emergency supply cabinet to provide essentials for staff members who stay on-site.  Water, one gallon per person per day, is recommended by FEMA as is a 3-day supply of non-perishable food and don’t forget the can opener.   Also consider the need for personal hygiene needs along with a flashlight, radio, and extra batteries.  It is a good idea to have some cash on hand as well.  In our modern society, debit and credit cards are common place.  However, when the power goes out and the communication lines go down, cash may be the only means at your disposal to purchase essential goods or services.

Make sure your computer data backup is current and accessible.  The accumulation of ice and snow can bring down power lines and communication lines.  During an extended outage you might need to relocate your business in order to get started again.  Having a usable backup will make that process much smoother and complete.   Remember too that not all data is computer based.  Be sure you have a way to retrieve paper based files, checks, and work in progress if you must relocate.

Examine your insurance policies and be sure you understand what is covered.   For example, do you have business interruption insurance and do you know what will trigger the coverage to start and end.  You should know what your deductible is and how it will be applied when you have a claim.  If you have coinsurance how does it work? You should also know what types of losses are excluded under your policy.  Know also your policy limits and how they apply.  Certainly, this is not an exhaustive list of the questions you should consider. Insurance coverage can be a complex topic which should be reviewed with your agent on a regular basis.

Do you have a written plan for how to recover from this disaster or is it all stored as institutional knowledge in the recesses of your memory?  Take the time to organize your thoughts, assess the process of recovering from events which stop your business, and put them down in an organized written document.  Your customers, employees, and vendors are counting on you to keep the doors open when a disaster strikes.  Make it a priority to do so.

KEDM broadcast - Time Management

Time Management Tips

Small business owners all face the one common challenge.  That is how to manage the one resource that cannot be changed -- time.  Everyone gets the same amount, 24 hours each and every day.  How well a business owner manages that time can mark the difference between a focused, smooth-running operation and one that seems to react and jump from crisis to crisis.  If you, like many others, are constantly wishing there were a few more hours in the day, here are some tips to help you get better control over your day. 

First, harness the power of technology to your advantage.  Adopt an electronic scheduling system that works for you.  Create one electronic calendar that you can access from anywhere and put all of your commitments there including ‘to do’ lists and occasional reminders.  Also, look online for ‘business productivity’ apps that can integrate into your daily work.  There are literally thousands of apps to improve efficiency with routine tasks, find what works for you.

 

Another way to regain some of the day is to limit the number of meetings you schedule.  Hold them only when necessary and keep them as brief as possible.  You might even consider having everyone stand during the meeting to encourage brevity.  Always start the meetings on time; people who are habitually late will quickly learn to show up on time.  

Next, delegate some of the work.  Trying to do everything limits the potential to grow the business, stunts the development of employees, and distracts the owner from focusing on more critical elements of the business.  The owner’s time is valuable, so, determine which tasks you must perform and train your employees to take over the rest.

Get control over email.  Try limiting the number of times each day you check email.  Checking in the morning, at lunch, and late afternoon may be enough.  Unsubscribe from email lists that clutter your inbox and provide little or no useful information.  Also, avoid using and train your staff to avoid using “reply all” when answering an email. More often than not, it just creates clutter.

Next, make regular appointments with yourself and keep those appointments.  Important but non-urgent tasks often get pushed aside while efforts are directed toward urgent events like dealing with a customer crisis.  Making a 15 or 30 minutes appointment with yourself creates a dedicated window of time to work on the long-term issues facing your business.

Finally, focus on yourself. While it may not seem like a time management tip, be sure you get enough rest and exercise.  This simple step will give you more energy to get through your day more effectively and more productively.  

Almost a century ago, the quality anagement pioneer, Dr. Joseph Juran, observed a universal principle he called the "vital few and trivial many".  Commonly  referred to as the Pareto Principle or the 80/20 rule, it is widely applied to a variety of management situations. With regard to time management it suggests that 20% of the things you do, those activities we’ll call the “vital few” will produce  80% of your results. It stands to reason that you need to make sure your focus is on the right 20% of your tasks and that you allocate enough time to do them.  The success of your business depends on it.

KEDM Broadcast - Social Media

Social Media

In today’s business environment the scope and influence of social media is enormous.  According to Social Media Today, Facebook has over 1.15 billion users. Twitter and “Google Plus” each have over 500 million users.  The variety of social media platforms permits immediate access to information and offers the ability to spread that information quickly.  For a small business owner, harnessing the power of the social media can be a daunting task.

The environment we call the Internet constantly changes.  New platforms emerge frequently to replace older ones and they do so quickly.  For example, in 2003, MySpace was the up and coming social media giant and Facebook was little more than an idea.  In just over a decade Facebook became the largest social media platform and MySpace is a social entertainment platform with a declining user population.   New technologies emerge redefining how people work and play in cyberspace.  New and more specialized platforms come online every month with a unique set of followers and influence. 

A number of factors are driving the growth.   Portable devices like smart phones and tablets allow us to carry technology with us wherever we go.  Portability coupled with the growth in communication networks allows people to stay in constant contact with social media platforms.   Whether in our vehicle, sitting in a restaurant, or attending a sporting event, people stay connected.  The expansion in the number of social networks creates niche groups with specialized functions offering something unique.  Twitter emphasizes microblogging using short posts; Instagram is for online photo and video sharing, while Pinterest targets theme based image collections.  This is not an exhaustive list of social media options, but does illustrate the diversity in social media sites.  Finally, simplicity of design and improvements in the product tools enable users to control the content appearing on social media.  Much of the content on traditional websites can be controlled and managed by end users with limited assistance by technology specialists.

Often small business owners question the rationale for spending the time and effort on social media.  The answer to that question is always the same – your customers, both current and prospective, are there.   Americans spend an average of 37 minutes daily on social media which is more than any other major Internet activity including email.  Over 60% of that time is not spent at the desktop, but rather it is on smartphones and tablet devices.  Social media, then, can be a powerful tool to build awareness of your brand and your products or services.  Because the Internet never closes, a business can deliver images, videos, text, and mail which can be viewed at the leisure of the user.  But, the process goes beyond simply delivering content.  Social media is about building community and that community then sharing your information with others in their sphere of influence. In something akin to watching a spider web grow, one user shares with another who shares with another and so on driving interest into what your business is doing.   It takes time to build, but can pay dividends over the long term.

With so many social media platforms available, we’re often asked which one is best for a business.  No absolute answer exists for this, but here are some things to consider.  First, look at the social media channel and see which one best aligns with your product or service.  Second, don’t try to do everything.  It is much better to be relevant and successful on a few channels than to be mediocre across many.  Next, work out a strategy and plan for implementing your social media activities.   If you need help with this or any business problems, we have resources to help guide you.

NFL - lockout / walkout

The billionaires are once again fighting with the millionaires over who gets to have the bigger share of the pie in the NFL through the collective bargaining agreement between the owners and players. With the current agreement about to expire and the two sides seemingly distant on key issues, the threat of a lockout by the owners in the absence of a collective bargaining agreement is gaining much media attention. And on the international stage that is the Super Bowl, there are proponents of positions on either side of the dispute using that stage to highlight their plight.

Having played the game as a young boy, having worked as a football referee for 15 years, and having followed the follies and successes of the New Orleans Saints for the entirety of their existence, I classify myself as something more than a casual fan. As a fan, I'm annoyed at how both sides of the dispute are treating us with complete disregard again. When football took itself off the map in 1982 and in 1987 the public (fans) were forced to re-evaluate their interest in the sport. Instead of collecting like pod-people in front the television, they began to use Sunday afternoon to rediscover life. People went to the park, spent time with family, read books, watched watched movies, etc, etc etc. Although it was a bit inconvenient for the first couple of weekends, we adapted and found other things to do. What people discovered was, for all of the excitement that might accompany football games, the game only took a few hours out of one day and it could be replaced by other equally entertaining activities.

The powers that be can choose to squelch professional football again this fall, but they will quickly realize how easily they have alienated another group of fans - fans that will find other diversions and fans that may or may not come back. It shouldn't take them long to realize the general public doesn't really care about their arguments. Professional football is just another sports that, in the modern day world of cable and 24x7 access, can be replaced with little effort. Whether it is called a lockout or walkout doesn't matter - the game won't be played. If the millionaires refuse to play for the billionaires and the sides can't to put the show on the field, I'll find something else to do (again) and be no poorer for the experience.

Somewhere Aesop is remembering the goose with the golden egg and thinking ... I told you so.

Airline competition

The airline industry, floundering and failing in a down economy and against growing competition, seems to be looking at a new business model for its survival. For the most part, air travel has become a commodity differentiated only by the color of the flight attendant uniforms. Overlapping routes and time slots have forced airlines to compete against one another solely on price. Although many people seek to blame Southwest Airlines for this problem, the fault lies in the individual airlines inability to provide a unique experience for which customers are willing to pay.

The new approach will no longer be based on competition, but rather on control. In recent weeks, major airlines have swapped slots between airports. A slot essentially gives an airline the right to reserve a time for a plane to land and take off. By giving an airline a greater number of slots at a specific airport, the airline gains more control over a greater number of passenger seats at that destination. By owning the bulk of the landing slots at a specific airport, the airline can also exercise more control over price usurping the need to compete on price. The smaller airlines will still be able to compete on price, but won't grow sufficiently due to slot restrictions which will constrain the number of seats they can make available.

In this "free-market exercise", it appears the airline executives have agreed to slice up the country among themselves so that each can control a major section of the market. While the new model won't be called a a monopoly, it will certainly begin to behave like one. Expect fares to rise and for customer service to continue to erode. What should not be expected is a return to profitability. Even with control over the airport, technology has transformed how business is done and the need for face-to-face exchanges continues to decline. People just don't have the need to fly anymore.

It will be interesting to see in a decade whether this deregulated industry finds itself reregulated and looking a lot like Amtrack.