BIZTIPS - April 12, 2009

by Art Hill

Biz Tips: Small Business Innovation Will Spark Recovery

On Friday, April 3, President Obama and other world leaders welcomed the countries of Albania and Croatia into the North Atlantic Treaty Organization (NATO). Both countries are candidates for the European Union. Both countries have come light years from the collapse of their socialist economies in the 1990’s.

When their huge, state-run companies imploded, tens of thousands of workers became entrepreneurs. Bakers, brewers, masons, mechanics, seamstresses, and countless other small enterprises were born. Some grew to serve European and global markets. Others remained family-scale. But together, they provided the economic stimulus needed to lift a generation out of poverty and establish a twenty-first century standard of living.

Fast forward to the U.S. in 2009. The Department of Labor just announced that March was the third month in which over 600,000 jobs have been lost. The running total of unemployed is now over 13 million. Large company layoffs dominate: Caterpillar 24,000, Johnson Controls and Dana (automotive suppliers) 9,800; IBM between 4,000 and 5,000; financial industry over 250,000 in 7 months.

Small businesses are not exempt. In a New York Times photo gallery “Picturing the Recession,” the first image is a closed repair shop with a “For Lease” sign where the business name used to be. But other images tell a different story. It is a story of innovation and hope, like the drycleaner’s sign offering free suit cleaning for a job interview, restaurant “recession special” meals, a free beverage with pre-payment for other drinks, subway artist pencil portraits, garage-shop services, home-based businesses.

At BMCC and across the State, Small Business Development Centers are seeing more people than ever starting and working on their own businesses. Some are victims of layoffs. Others are working through recession-related business challenges. Still others are expanding personal skills or hobbies to generate income. Many are looking for innovative ways to ride out tough economic times and prepare for recovery.

A consumer products manufacturer recently showed us her new line with a lower retail price point than her standard products. Using fewer and less exotic components, she is able to maintain her profit margin despite lower wholesale prices. Another business owner is sub-leasing space in his facility to generate cash and stay in the same location for the recovery. A successful contractor is training for certification in residential and commercial solar installation. A service provider is getting outsourcing contracts as a result of large company staff reductions. An artist and business owner are licensing their unique designs. A “back office” billing operation is expanding in their rural, small-city location using high speed internet services.

Jimmie Wilkins, Director of the Chemeketa Community College SBDC recommends the book “Weird Ideas That Work” for creative solutions to business challenges. Doug Lamberson of the BMCC SBDC is offering the workshop “Free Radicals of Innovation” in Hermiston on May 7 and Pendleton on May 26. These are opportunities to think “outside the box” in your small business recovery plan.

One final note. If somebody tells you education doesn’t matter in tough economic times, refer them to this month’s Department of Labor unemployment statistics. National unemployment is 8.5% but it’s 13.3% for those without a high school diploma vs. 4.3% for college graduates. That may help explain the 17% jump in BMCC enrollment during the first week of Spring term.


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