Missouri Small Business and Technology Development Centers Blog

What do you and your colleagues talk about when you’re gathered waiting for a meeting to start? Or when you take a break to enjoy lunch together? Since we’re all business-oriented types in our shop, we usually talk about business. And most commonly, about marketing. And that often turns into discussions about current marketing campaigns.

Among our favorites right now are the E Trade babies and the Capital One Vikings. (This is not an endorsement of either company; we just agree that their advertising is memorable.)

But another has surfaced recently that is getting a lot of interest. Domino’s Pizza’s campaign, practically admitting their pizza has been lousy for a long time and promoting how they have changed it.

We agree it’s a bold strategy. But we disagree on whether or not the pizza is really better. It’s different, but it may not be better. There are two interesting themes about this. One is that Domino’s is not really known for taste, such as our locally owned pizza place, which is really hard to beat. It’s known for convenience. So have they gained anything by changing something for which they are not best known? Most of the people I know who buy Domino’s don’t do it for the taste. They do it because it’s fast, and they can feed the kids and get on to other things in a matter of minutes.

Another discussion surrounds what is actually catching our attention in their new ads. Is it that we really care about the changes they have made to the product itself, or is it that we are fascinated by a company freely admitting that they believe they have produced a sub-standard product for many years, and they are owning up to it? Are we really interested in the pizza or the fact that they are publicly beating themselves up?

Whatever the motivation, people are trying the new pizza. So, for the moment at least, Domino’s will likely see a spike in sales. It’s too soon to tell if it will allow them to capture more of the $15 billion in annual pizza sales nationwide. We’ll be watching to see what their next marketing strategy is after they have finished being hard on themselves. I don’t think we can watch that indefinitely.

I heard someone on the radio the other day describe herself as a possibilist. Not an optimist. A possibilist. She was discussing the economic recovery, and she said she wasn’t ready to be totally optimistic about it yet, but she was willing to consider the possibility of something even better rising from the ashes of the recession.

Recent research on the attitudes of entrepreneurs indicates that many are in the same frame of mind. Optimism levels are returning close to those of pre-recession days. Whereas in August 2008, about 56 percent of business owners were feeling hopeful, in January of this year, 75 percent indicated they are feeling optimistic about the future.

Average spending per firm in online marketing is expected to rise 16.1 percent this year. Travel is predicted to increase 9.6 percent, and professional services may rise by 6 percent in the coming year.

Not surprisingly, small businesses are most concerned about the cost of health insurance and employee benefits. About a third of small businesses indicated their support for President Obama’s healthcare legislation.

Regarding the economy, 38 percent believe the economy is starting to turn around. That number was 28 percent last August. But only about half believe the economy will return to its pre-recession stature.

We need more possibilists — those who look at the facts of the situation and make the best — and more realistic decisions for their businesses and communities. We need to remove negativity from our lexicon and replace it with realism. Only the realists can see the true possibilities.

A jobs bill with some small business advantages was signed into law yesterday in Washington.

Although it’s not as comprehensive as some had hoped, but it does offer a few benefits, including two tax breaks for qualifying new workers hired in 2010. Companies will be exempt from paying their share of Social Security payroll taxes, normally 6.2 percent of a worker’s wages, for any new worker who was unemployed for the prior 60 days. Workers will still have to pay their own Social Security tax share.

Each of those new employees retained for a full year would net the company an additional $1,000 back on its 2011 tax return, or 6.2 percent of the wages paid to the employee in 2010, whichever is less. Companies of any size can claim the credits, for an unlimited number of workers. The measure’s estimated cost is $13 billion over 10 years.

Some experts think this will help entrepreneurs make hiring decisions that have been uncertain in recent months. With the recession making it more and more difficult to predict revenues, many employers have opted not to bring in a new employee. This will hopefully make that determination easier.

In addition, the legislation provides an opportunity for small businesses to write off as much as $250,000 of their capital expenditures in 2010. This deduction, which was introduced in 2008 and renewed last year, gives companies considering buying assets like vehicles and machinery an incentive to do it in 2010. The measure’s estimated cost is $35 million over the next decade.

The December 2009 edition of Entrepreneur Magazine identified “Green Power” as one of the top 10 small business sectors continuing to thrive even in these recessionary times. It’s predicted to become an even larger phenomenon in the future.

Clean energy is called “the challenge of our generation” by industry observers. Many believe it’s better characterized as “the opportunity of our generation.” The momentum about the possibilities in this industry is growing so rapidly that MIT recently launched a professional development opportunity entitled Clean Energy Ventures: Creating Innovative New Businesses through Entrepreneurial Management.

It appears that doing something good for the environment can also mean doing something good for the economy — job and business creation.

Other countries are stepping out strongly in this arena. For instance, China’s richest woman, the owner of Nine Dragons Paper in China’s Guandong Providence, made her estimated $3 billion fortune by recycling scrap paper imported from the U.S. Other entrepreneurs are turning waste into feedstock or deploying small scale solar or renewable energy technologies at the village level.

There has been a lot of focus on how green jobs will play an important role as we exit the recession. But one of the most promising is for those who create their own job — the green entrepreneurs. They may approach it one of two ways. They may take an existing industry and reform that industry into a green one. Or, they may develop their own business based on a new technology, service or produce. Both strategies are important and job-creating. There is definitely promise in this area. Many ideas remain undiscovered. The green industry is expected to top out at $1.5 trillion within the next decade.

One of the key opportunities is making the town/gown connections between universities, communities and entrepreneurs as solid as possible. We need to ensure that researchers are getting their green technologies off the laboratory shelves and out to the marketplace, and we need to ensure that entrepreneurs and communities are capitalizing on the wealth of knowledge within university walls when they seek to solve renewable energy or other “green” challenges.

In the end, it will take systematic implementation of technological processes, and not just invention add-ons to existing systems. After all, Thomas Edison didn’t just invent the light bulb, and try to plug it into kerosene lamps. He piloted an entire electrical system on Wall Street before taking it out into the community. And Henry Ford didn’t just invent the internal combustion engine. He created the entire automobile factory system to support the introduction of that innovation into the horse and buggy economy of his day.

Greening our world requires not only the technology, but a new business model, a market adoption strategy and government policies that support the transition.

We’ve heard a lot lately about the difficulty small businesses are experiencing in getting credit. When you consider that small businesses are responsible for the majority of job creation, particularly during economic recovery, the urgency about credit becomes even more pronounced.

But recent information from the National Federation of Independent Businesses indicates that credit may not be the most nagging problem for entrepreneurs right now. Instead, they report that slow sales are the major pain point. While finding credit is more difficult than it has been historically, that is not what is cited by business owners as their most pressing problem.

Our small businesses need sales, and when everyone from the single-person household to major organizations is reeling from this economic downturn, increasing — or perhaps merely maintaining — sales seems like a very uphill climb. It takes creativity.

Yesterday, I heard a local window and siding company advertising on the radio with a new promotion. The owner talked about how he needs to keep his workers working. He said that he has 115 families counting on him to make good business decisions, so he’s offering 10 free top-of-the-line windows with every 1,000 square feet of siding installation. In the advertisement, he states that he knows he has to lose a little to ensure he can keep his employees busy, because when the weather breaks and the economy improves, he’s going to need those workers.

What I really liked about this advertisement is the honesty of it, and the pure verbalization of the thought process that so many business owners are going through right now. Sales create jobs. And more than any other concern, small business employers carry the responsibility for their workers on their shoulders every day.

When you put it in human terms like that, it is a very compelling argument for supporting our local small businesses.