Really Simple Market Research Tools for Small Business

Over the years my business consultant and I have met lots of folks looking to start their own business. Generally after offering them a cup of coffee and asking what type of business they are planning to launch, my next question is, “so, what have you done up to this point to estimate the market demand?”. Typical responses usually go something like these:




· “My gut tells me it can’t miss!”
· “my mom said she would come to my store”
· “Everyone at church thinks it is a really good idea… we need one of those in town”


“Besides, I am here to get help putting a loan package together, what’s market research got to do with my loan request?” Of course that nasty habit bankers have of asking how you plan to pay the loan back could be a hint. But usually when you talk about market research their eyes roll back into their heads. They think market research takes lots of money, lots of surveys, and statistics, certainly way above what a small business person could afford or understand.



The truth is, market research is absolutely critical to small businesses, regardless of the type of product or service and thanks to the internet, the data is easily available at reasonable costs, you just have to know what type of information you need. Market research tells my small business owner:

How many potential customers are in the trade zone
How much they will spend on a product or service
Where they are located
What demographic, socio-graphic or other factors influence buying decisions and how to break the market into homogenous sub groups to target
Who competitors are, where they are, and what their weaknesses are.

Whether the client is in retail or wholesale, manufacturing or service, transportation or health care, businesses (B2B) or to consumers (B2C) knowing the answers to the questions above is vital to long-term success. Part of the problem of course is the amount of information out there especially on the internet. A “googled” market research resulted in 23,900,000 hits and free market research narrowed the field to only 38,900 possible sites. What to use? What is best? What is a scam? Easy to see why entrepreneurs throw up their hands and just “go on their gut.”

At the Small Business and Technology Development Center we use Hill Search, the James J. Hill on Line Reference Library for a lot of our clients initial market research needs. As a quick example, let’s assume a client in Batesville, Arkansas (Independence County) came in to the office and wanted help finding market research information to determine feasibility of starting a retail jewelry store in that county. For this article we will keep it simple, a primary trade Zone of Independence County only and strictly a brick and mortar business (we will discuss e-commerce market research in another article).

Using the Hill Search Library in 45 minutes I was able to provide the entrepreneur with a good thumb nail sketch of the market potential for an additional jewelry store in that county and an initial market segmentation outline.

For the initial review I used three separate Hill Library resources:

· their DemographicsNow database that provides extensive demographic information about households and basic consumer expenditure data on trade zones (by zip code, town, county, MSA, state or region) that told me everything I wanted to know about demographic makeup of households in Independence County as well as overall consumer expenditure information on apparel and jewelry spending.

· From there hopped over to the Hill Library New Strategist Demographic eBooks, over 30 on-line books with specific information about how much consumers spend on a wide variety of products and services broken out by demographic sub categories. I used their “Who is Buying Apparel” and “Best Customers: Demographics of Consumer Demand” eBooks to get detailed expenditure information on jewelry by a variety of demographic sub categories including income, age, education, and more. This information combined with the county household demographics will determine not only overall county demand for jewelry but also help segment the households to find out who the best potential customers may be.

· Finally stopped in at the Hill Library Special Issues database, searched for “jewelry” and found 8 industry reports outlining the State of the Jewelry industry for 2008, forecasts for the coming year and much more. All in about 45 minutes of searching.

So what did I have to report to my “client”? From the DemographicNow section I found:
There are 13,888 households in the county as of 2008, up from 13,467 in the 2000 census and projected to grow to 14,148 households by 2013. With average household income of $48,236 in 2008 and projected to grow to $53,821 by 2013.

The average household in Independence County spent $121.00 per year on jewelry (not including watches or repair) So overall market potential for the county to purchase jewelry was just over $1.68 million and is projected to grow to $132.00 per household by 2013 or a overall market potential growth in next 4 years to just under $1.8 million.

At the present time there are only 2 existing jewelry retail stores in town. There were three, but a regional chain was forced to close in the fall. Of course Walmart and J C Penney have jewelry counters with sales, and jewelry is sold at various pawn shops in the area, even the gum ball machine outside Krogers. But only 2 retail jewelers. And total retail sales of jewelry in the county was less than $485,700.00 which meant that many consumers were buying their jewelry outside of the county so a leakage existed that might be exploited.

From the eBooks on Consumer Expenditure I found out who buys the most jewelry by demographic features. As a summary:

Households earning under $20,000 will spend an average of $30 a year on jewelry while households earning $70-80,000 per year will spend 171.32 per household and those earning over $100,000 will spend $353 per household on jewelry. Obviously there are far more households earning under $20,000 than over $100,000.00 but does quantity matter or does quality? High income households spend three times the average on jewelry and account for 40% of the total market. The 3,315 households earning under $20,000 will spend $30 a year or a market potential for that segment of only $99,450. But the 1,093 households earning over $100,000 will spend $353 per year or $385,829. Households earning over $100,000 make up only 7.8% of all households but will buy 23% of all the jewelry. See how segmentation works?

Households where head of household is a high school graduate will spend average of $75 per year on jewelry, while those with a Masters or doctoral degree will spend $227.9 on average.

Married couples without children at home (empty nesters) spend 37% more than average.
Two age groups own most of the market 25-34 year olds (many buying engagement rings) and 55 to 64 year olds (many buying anniversary gifts).

Now, we can go back to DemographicsNow to find the actual number of households by the different income, age, even educational levels and apply that information to see how much my best customers will spend. Finally the industry information from the Jewelry Retail Association Trade magazines will provide information on issues impacting stores in the coming year.
A complete copy of all of the information is available for anyone who would like to see an example of what the data looks like and the format. I will be happy to send it to you if you leave a comment requesting it or shoot me an e-mail.

So, if a small business or entrepreneur wanted to purchase this data what would it cost? Demographic data on Independence County and summary jewelry expenditure data from a source called Demographics Now published by SRC, LLC. You can find a wide variety of consumer expenditure data, demographic data on a variety of groupings by zip, city, county, and state, MSA for all over the country for only $60 dollars per month or $550.00 per year. Specific demographic expenditure by categories and best customer eBooks lists from New Strategist Publishing which you can access for $60 to $80 per e-book. Or you can access all of this information along with a lot more data from the James J Hill On-Line Research Library for $1,295 per year subscription. Industry specific information is available from the Jewelry Retail Trade Association for a fee as well.

However, the Arkansas Small Business and Technology Development Center network offices are all paid members of the Hill Search Library which means that their clients have access to all of this data through the center at no charge. Plus the ASBTDC staff provides free assistance in analyzing the data and helping the client make decisions based on the information. There is no charge to be a client, nor for any assistance through the centers.

Finding good, reliable market research data is possible. It is just a matter of knowing where to look. The Hill Library is an excellent tool, or using the free services of the ASBTDC to help develop initial market research. Next week, drilling down to find customers in your trade zone.I will expand on types of market research in future articles that will look at other tools and information available to small business owners in Arkansas. Let me know if this is useful. If you would like a copy of the demographic, consumer expenditure or industry information to see what the data look like, let me know. Post a comment or send me an e-mail and I will be happy to send you this example.

Next week we will discuss how to drill down market research information to target specific customers you want to target for your marketing plans.

Perspective of Business in Batesville

Coming up February 23^rd, the Chamber will have its 90^th installment of our annual banquet and awards dinner.  The last two years, and years before that, we have had it on campus at UACCB in Independence Hall.  While I will spend some time later telling you more about the awards we will give out, I want to spend some time talking about why this is significant, at least in my opinion.  When you put in perspective the Chamber has been around for ninety-years, that is a pretty amazing feat.  It shows the level of importance the employers of our area have put in our existence.  I think it also shows how involved our Chamber has been in the development of our community over the last ninety-years. 

As the list could go on for a while of the accomplishments, and those of our Board and previous Chairman have made, I think it is more important to discuss how we have worked with people all across our county, state, and national governments during that time.  Recently, we found a treasure trove of pictures in a back cabinet and they are a treasure indeed.  We have pictures of business, people, leaders, grand openings, tours, parties, and so much more that give us a glimpse into a time when our area was really growing and on the cusp of improvements and technology.  We have pictures of Governors, United States Senators, United States Representatives, one United States President before he was President, and so much more.  But that is not what I want to relish in.  I want to relish in the fact that they were all here.  They were working with leaders in our community.  They looked at our area as a center of influence, of importance, and of significance.  While those pictures show us that some forty plus years ago and older our prominence, I believe that we retain much of that today.  With all the new sessions and elected officials taking office this time of year, I am reminded of what the past ninety-years has been like for our area.  I can look back over those pictures, talk with older folks in our area, and know that we were the center of so much.  But, as with time, there are so many things that pose challenges to that progress.  Change is always going on and with it a constant reminder of what needs to be done.  As we embark on our 90^th installment of our banquet, we also begin another year here at the Chamber.  At our banquet we will be sharing with our membership the vision we see for 2009 and going forward.  We can look back over time and see what was accomplished and how.  Bringing back some of those ideas and relationships, I believe, will begin a renaissance in our community that will usher back in to our community that same place of prominence that we enjoyed for so many years.  As a Chamber, we want the “outside” community to know that we are on the move, that we are taking steps to take care of ourselves, and that while we are doing those things, we want them to be on board with us, not the other way around.  We want the leaders outside of our area to know how they can help us, and how they can fit in to our team for the next phase of growth that we are going to experience. 

Do not get me wrong.  I am not being arrogant or condescending in my approach.  But I am looking at this with confidence because we are entirely capable of doing all these things.  We are capable because the people of our community are capable and deserve this from their leadership.  I believe the positions of leadership in our community must be met with humility because of the responsibilities we face, decisions we make, and the future we are molding.  It is an awesome responsibility that must be met with seriousness.  But for those of us in those positions we take our jobs very seriously, with great passion, and a mentality of thinking first and acting second.  We do it because of our community and what we believe is owed to its citizens.  So when you look back over time, and as you look forward to our future, I hope you will share with me the same confidence that we are rebuilding our team and forging ahead for some of the greatest people in all of Arkansas.

My Dream for Independence County

While I am an optimist, and will frame my article as such, I believe that we face some challenges going forward.  I will now dispense with what I believe we should do, can do, and hope to do post December 9^th.

I have a dream that as a county, we can come together regardless of our cultural identities, affiliations, or social circles and address the problems that we have.  When we, as a community, believe as a whole that we can do more good together than we can apart, our success will begin, and it will be difficult to stop.  I have a dream that as a community, this tax will give us a tool to use that will make our economic picture much more attractive, but that as a community we can start to look at other things that need attention and work from us as well.  I believe those issues to be substance abuse in our children, poverty in our working population, and apathy with all those in between.  I believe that when we as leaders and concerned citizens of Independence County realize all that we have in front of us, that as a collective, we can accomplish a great and many things.  You see, all these issues pertain to economic development, and while this vote and subsequent tax is related directly to jobs, these other issues remain and we can not sit idly by while areas of our county are deprived, while people have struggles, and our community still hurts.  Our future was given a significant lift by the passage of this vote, and it begins a new chapter in the legacy of Independence County of which I believe one day we can all be proud.  But we should ask ourselves is this the end or rather a beginning?

I have a dream that we, as residents of Independence County, will start on this journey of  revitalization by which we will see growth all across the county as a result of our vote, by which, we will have tools that will benefit everyone in our area.  I have a dream that ten years from now we will look back on this effort and consider it to be a time and a place by which everyone in this community put aside whatever differences were present, whatever resentments that we harbored, and brought to the forefront of our minds the concern of everyone else in Independence County and said that never again would they let their community get to be in that shape again.  I have a dream that we will all work on issues that share a common good and share a common fate, and those are of economic well being for ours and our posterity.

I have a dream that this effort will be just the beginning in a period of change that we will see in our community that will transfer itself to our youth, and those who genuinely hold the key to future’s door and that they will use with it a passion and a care that they saw in their parents and grandparents and was evident in their action they took to take care of their home, their community, and that of their friends, neighbors, and fellow citizens.  I have a dream that the children of Independence County will have learned a lesson in how a community who collectively became apathetic to important issues collectively became passionate again.  That when the children of Independence County look at this in their years to come, realize and will find true, that people can and will change, and all it takes is a collective effort and that the saying “no man is an island” is true.  They will look back and say that we, the people of Independence County, took steps to secure our future, and for that, they will be thankful for more reasons than can be explained.

I have a dream that does not end with what has just been enumerated in this article, but continues on a path and direction that our youth will set for us in the future.  Our dreams become realities when we take steps to see that they happen, and the only difference between dreamers and visionaries is the passion by which visionaries desire to get things done.  My dream has a lot of visionaries in it but in reality, it is no dream at all.  We have some very passionate people right here in front of us.  For our dreams to become realities, they just have to learn what passion looks like and means again.

My Dream for Independence County

As you read this article, it will be the Wednesday after the sales tax vote for economic development.  As I write this, I am contemplating the two outcomes and questions arise as to what both of them will mean for our community.  I do not believe that excitement would describe my thoughts if this were to pass would be accurate.  Nor would worried be my thoughts if it were to have failed.  Both of those are very temporary while the issues we face will take a little while to fix.  While I write this, I believe this tax will pass because I think the people of Independence County will have cast a vote for themselves, in the belief that they, as a group of people, can do more and do something about the economic situation that they find themselves in.  While I am an optimist, and will frame my article as such, I believe that we face some challenges going forward.  I will now dispense with what I believe we should do, can do, and hope to do post December 9^th.

I have a dream that as a county, we can come together regardless of our cultural identities, affiliations, or social circles and address the problems that we have.  When we, as a community, believe as a whole that we can do more good together than we can apart, our success will begin, and it will be difficult to stop.  I have a dream that as a community, this tax will give us a tool to use that will make our economic picture much more attractive, but that as a community we can start to look at other things that need attention and work from us as well.  I believe those issues to be substance abuse in our children, poverty in our working population, and apathy with all those in between.  I believe that when we as leaders and concerned citizens of Independence County realize all that we have in front of us, that as a collective, we can accomplish a great and many things.  You see, all these issues pertain to economic development, and while this vote and subsequent tax is related directly to jobs, these other issues remain and we can not sit idly by while areas of our county are deprived, while people have struggles, and our community still hurts.  Our future was given a significant lift by the passage of this vote, and it begins a new chapter in the legacy of Independence County of which I believe one day we can all be proud.  But we should ask ourselves is this the end or rather a beginning?

I have a dream that we, as residents of Independence County, will start on this journey of  revitalization by which we will see growth all across the county as a result of our vote, by which, we will have tools that will benefit everyone in our area.  I have a dream that ten years from now we will look back on this effort and consider it to be a time and a place by which everyone in this community put aside whatever differences were present, whatever resentments that we harbored, and brought to the forefront of our minds the concern of everyone else in Independence County and said that never again would they let their community get to be in that shape again.  I have a dream that we will all work on issues that share a common good and share a common fate, and those are of economic well being for ours and our posterity.

I have a dream that this effort will be just the beginning in a period of change that we will see in our community that will transfer itself to our youth, and those who genuinely hold the key to future’s door and that they will use with it a passion and a care that they saw in their parents and grandparents and was evident in their action they took to take care of their home, their community, and that of their friends, neighbors, and fellow citizens.  I have a dream that the children of Independence County will have learned a lesson in how a community who collectively became apathetic to important issues collectively became passionate again.  That when the children of Independence County look at this in their years to come, realize and will find true, that people can and will change, and all it takes is a collective effort and that the saying “no man is an island” is true.  They will look back and say that we, the people of Independence County, took steps to secure our future, and for that, they will be thankful for more reasons than can be explained.

I have a dream that does not end with what has just been enumerated in this article, but continues on a path and direction that our youth will set for us in the future.  Our dreams become realities when we take steps to see that they happen, and the only difference between dreamers and visionaries is the passion by which visionaries desire to get things done.  My dream has a lot of visionaries in it but in reality, it is no dream at all.  We have some very passionate people right here in front of us.  For our dreams to become realities, they just have to learn what passion looks like and means again.

Costs of Economic Development

What are the costs of having an economic development program in Batesville? What will we be spending the tax dollars on, and how do you determine the amount that you spend? These are two very important questions, and ones that are the most common from people who want to know more about a proposed tax. The last thing I want my tax dollars doing is being spent on something that will not be of benefit to both myself and other citizens. Government as a whole has over time taken tax dollars and spent them on things that have not benefited tax payers, and in fact, have benefited the governmental entity, and in turn, have benefited no one. What is different about this effort is that your tax dollars are going to be spent on things that will positively effect jobs. Period. The group of people that have committed to being on the initial board of the non-profit group that will make the recommendations to the Quorum Court are people that understand business, they understand what it means to do business well, and they will apply their experience to this process.

What makes that important is that too often we may expect our governmental agencies to make business decisions when they are not necessarily geared to do so. That is no slight to any of our governing bodies, but they specialize in ordinances, legislation, protection, and services. Think about it this way; if government existed to make a profit, something would be terribly wrong with that picture! Enter in this group of business people who understand what it will take to grow business. They understand, based on their industry segment or service sector what success means, and what we need in our community. We have purposely worked to get people from all across Independence County from our various employment areas that understand this. It’s the balance between government and business that we need. The two must work together to be successful, and if they don’t, we will be successful in doing nothing.

The cost of economic development varies, but its important to realize that we have to prioritize these monies to what our needs are. Right now, its important that we assist local companies that have expansion projects or needs for retraining. Currently, we have some employers of all sizes that are doing well and are expanding and will be adding jobs to our local economy. Success in economic development requires planning, and not just for the addition of jobs, but the kinds of jobs. We have a very diverse local economy that we need to have someone with experience in doing this in other communities come in and help lay a vision with this board to determine what our strengths are and what we will need to be doing to be competitive and retain, recruit, and enhance the jobs in our area. We will not sit idly by and let people come to us looking for assistance in their expansion efforts, in their efforts to bring a new business to our area, or looking for some training assistance. We will seek those out, and will solicit from the community the needs of our employers so we can utilize these funds in a responsible manner.

The price that we pay for this kind of effort is priceless in that the steps we are taking to take care of ourselves will pay off in the long term. The money that we will be offering companies with this tax goes a long way in their minds in that we have money that will help them in either the retention efforts or their expansion. But once we all begin to work together on this effort and we all know that we are taking steps forward to secure our future that is an investment in this community that no company can ever make, no person can ever contribute to, because it is larger than that. An effort like this is our county coming together through a collective effort that we all say without hesitation we are going to do something about our future, and we are going to start now. The reality is the communities who have the resources to market themselves, to put incentives on the table along with the state, will be in the game and will vie for jobs that are out there. Even in these challenging times, there are companies looking at growing.

On December 9^th, everyone in this County will have the opportunity to voice their opinion on this matter and cast their vote. As a community I urge you to, as one group of citizens, vote yes for a priceless investment in our collective future, and one that will reap dividends for us, our children, and our grandchildren.

What Economic Development Is and Does

Over the next four articles, I am going to outline what I believe economic development will look like going forward, and how this relates to the vote on December 9^th for an economic development tax.  I want to do this so that the readers of this article will hopefully better understand what I do here at the Chamber, and what I envision we will be able to do with this tax.  As it goes with any vote that increases a tax on the citizens and goes to a governmental agency, there is automatic questions that arise, and justifiably so.  I am that way, and believe that as citizens we should question our government in ways that we don’t always agree.  That is our right as American citizens and anything other than that would be disappointing to me. 

Economic Development is as broad as it is wide.  It is an all encompassing phrase that at times can be hard to understand.  It’s a phrase that a person can twist to fit to what they think it should be, or what they think it should be for.  As a rule for my position and what I do here, economic development is an effort I undertake to either retain, enhance, or create jobs for the people of Independence County.  If what I do fulfills any of those three criteria, I believe I am doing my job.  As with any job, that I have or that you have, you need tools to do your job.  I have talked previously about incentives, and the need for them in our competitive day and time.  I wont talk too much about that in this space here, but I will say they are an important part of what I do.  More importantly, and what comes before incentives are ever offered, is making sure that those outside of Arkansas are aware of us, that we exist, and what the characteristics of our community are.  The core characteristics of our community will make us competitive almost immediately once they are brought out in the open and shown to site consultants, and others who could be interested.  But there is a literal cost in producing those materials, to send those out, and to create those materials.  We will have to market ourselves to the outside community so they know we exist, and that we can deliver what they are looking for. 

Another aspect that is important that we as a community understand as well as the outside is what our strengths are as a county.  I will advocate for a trusted and experienced group to come in and help us formulate a long term strategy to recruit companies to our area.  I have an idea of what would be great types of industry to recruit to our area.  But, I would be doing a disservice to you, the taxpayer, if I spent time and your money on things that would end up not being a good fit for us, or that we don’t have the resources to attract.  We have to know what we can attract, what is a good fit for us, and what we need to plan for.  In 1986, Jonesboro did just this exact thing.  They brought in a firm who told them about the industry they could attract, and what they needed to do to ensure that.  I will advocate we do the same so that we don’t waste one taxpayers dime on efforts that do not provide a solid return on their sacrifice.

Economic Development is also helping companies around the county as they work to increase their workforce, or make improvements that will aid in them remaining competitive and as a result staying in business.  Since the Copeland announcement, I have had several calls from businesses about monies available to help them in their expansions.  I have told them about this effort, and they are in support of it as well, and understand how it can help them.  The board that will work with the economic developer will make the suggestions to the quorum court about projects just like this, and we will be actively seeking out companies to help, to invest  your dollars in to, to help them create new jobs, help them keep jobs here, or help them in other ways.

The other reality about economic development is looking to the future, while dealing with current issues.  It would be a disservice to the taxpayers if these leaders did not look to the future and think of what needs will be.  These funds can be used to issue bonds for purposes related to economic development, and that can include new road infrastructure, industrial park, or other improvements for the community to make it competitive long term.  This is a key part of what it will take to be competitive, and to enhance our community for the good of the taxpayers.  All of these things will be done will transparency and reporting to the public.  Any taxpayer of Independence County will be able to view records about our efforts, minutes of meetings, and have an understanding of what is going on with their money.  They will be able to view financial records, and know what their money is being spent on.

Its important to understand what economic development is, what it does, and I hope in today’s article I have outlined the key areas of this proposal.  Please contact me if you have questions about this or any other article on this subject.

Upcoming Union Legislation Facing Congress

As of the reading of this article, there is a good chance we have either elected a new President or we are in the middle of a “hanging chad” type ordeal that could drag out for a while.  In either instance, sentiment is very mixed, if not divided, on what either candidate means to our country in the coming four years, and even more so, what either candidate means to our economy.  What is not debatable, what can not be spun in either direction, is that we are in unprecedented times of economic challenges, and there are some things rearing their heads that we have to consider their potential negative, if not devastative impact, on our economy.  One of those things is the upcoming legislation that will be brought up in Congress about the Employee Free Choice Act, or the Card Check legislation.

When unions first emerged on the American landscape back in 1953, their formation was fairly simple and regulated.  Those interested in forming a union could gather signature cards, and once they had more than 30% of the total employees signed off on forming a union, they could then ask for a secret ballot election, which would be overseen by the Federal Government.  Once they had 50% of the votes from that employer, their union was certified.  This new legislation exposes everyone to a very dangerous process in that it would allow union organizers to solicit signatures openly in public to employees subjecting them to threats, intimidation, and abuse, and once 50% of the employees signed off on this legislation, the union would be formed.  By this legislation, there would be NO election, and the right to a secret ballot would be ILLEGAL!  Imagine this in context to the recent Presidential election.  Imagine if your vote was not secret.  Imagine if you were allowed to be pressured to vote for a particular candidate openly, in public, facing ridicule and threats if you did not vote for them, and had to sign off on a card for that candidate.  Its very similar in that you are voting on your job, your source of income, and with this proposed legislation, you as an employee would be bullied into signing these cards for a union.

What does this mean to employers, and to the livelihood of our community?  This legislation would allow people to form unions at ANY size company, period.  It would allow the smallest of offices to the largest of companies to form unions.  Employees would have to pay union dues, even if they did not want to, and rely on union representatives to negotiate all the different aspects of their benefits on their behalf.  Unions have proven to be very corrupt, with money not going to promised areas of contributions, and for the most part, have not shown to help employees standing in too many areas.  In fact, unions have done more damage in this country as a whole than they have good.  This kind of union legislation has impacts across our state.  Currently, Arkansas is a Right to Work state, and that gives employers the ability to hire and fire as they want, as well as employees to do what they want.  Not having a heavy union presence in our state is very attractive to companies that are interested in locating here, and if we allow this legislation to pass, things will change so drastically that one competitive advantage we have will be eliminated. 

In talking with some of our largest employers in our area, they all agree that for the most part, if you treat your employees with dignity and respect you don’t have to worry about union influences.  But, rogue legislation will allow employees who have interests of unions first in their minds, and not what would be best for all employees.

What we have an opportunity to do, and each and every one that reads this article should call or send a letter to their congressman, is retain the rights we have as employees to not be represented by corrupt unions and unions groups, but that we remain in control of our own professional lives.  I believe that as a whole, people in our area want good paying jobs provided by good companies, who provide good benefits.  Being able to attract those companies here to our area will be severely limited by this kind of legislation.  Last year, in the House of Representatives, this legislation passed and Representative Marion Berry voted for this legislation.  Currently, Senator Blanche Lincoln is undecided and Senator Mark Pryor is in favor.  This legislation benefits only union bosses and organizations, not the employers, and especially not the employees.  Do your research on this bill, but we would encourage you to contact your congressman and urge them strongly to vote no on this legislation!

Education and Economic Development

Recently, I attended the Governor’s Conference on Education and Economic Development with several other leaders in our community from Batesville, including Anne Moore, Ron Carter, Ed Mabry, Tim Bruner, Ann Webb, James McLean, David Wyatt, Fran Flenor, Ted Hall, Kathleen McNamee, and David Baker.  The purpose of this summit was to have each county in Arkansas represented with at least ten attendees so we could hear presentations and get information that we could then take back to our communities and devise a strategic plan in accordance with our educational system here as it relates to economic development.  I have had some time to think about the summit, and what we will be doing here locally to come up with a comprehensive plan to address what we need to do going forward.  While I appreciate the work the Governor and his staff put in to this, there were some important elements missing, and I believe they are crucial to the overall landscape of this picture.

When you consider educations role in the grand scheme of economic development, its not so black and white as one would think.  College degrees, while good, helpful, and beneficial to the recipient (this writer has one, just in case you wondered), are not what every employer wants.  There have been correlations made that say if we are to compete with the likes of China, India, and Luxembourg, we have to graduate as many college grads as we can or face the impending doom of economic isolation by these other countries.  Well, I have a problem with that.  Of course, that is somewhat of a generalization, in which we also heard how our math and reading scores were low, etc.  But the real issue we have in our country right now is not a shortage of students or people for that matter its that we don’t have people who are inspired to do what they really want to do.  Granted, a majority of people want to work and have jobs and with our current economy that is a challenge to an extent, but for the most part, people, especially our young people, are probably on a track to do something they may not want to be doing.  Is college for every student?  Do we need every child to go to college?  Does going to college mean that every child will do exponentially well and be so much more successful?  I am here to tell you that the answer to all those is no!  Like you, I know several people who have not gone to college that have done very well in their lives.  Like you, I know of jobs that don’t require a college education.  Like you, I know that college is not for everyone.  While on an economic development trip to Rome, Georgia, we visited with leaders in that community who had experienced layoffs that exceeded 7,000 people over a period of five years.  They, as a community, came together and devised a plan that set them apart not only from other places in Georgia, but other places in the Country.  So, a contingent from Arkansas went to visit, and the results to me were astounding and a testament to a methodology that looks at what is the most important and valuable to the student, not the system.

They have a different school system structure over there (county and city schools), but in their restructure, they said that there are three tracks that we need to encourage a student to take, starting in 8^th grade.   The tracks were to go to work after high school, to go through a two-year program, and to go to college.  They said that they would overwhelmingly support every child no matter what their choice was (which was made with their parents), and would encourage them and give them the tools necessary to be successful no matter the route they chose.  They would show the students the income potential in each scenario, and what it would take to be successful in each path.  I would like to insert here the relevancy of this was seen in a video last week in Little Rock where there were at least two children who said that they wanted to be a truck driver and a construction worker, respectively.  These children are a prime example of doing something that did not require a college degree.

Their efforts behind a two-year program included nursing, and health related fields, as well as skilled positions like welding, plumbing, electrical, and other certification type jobs.  Lastly, they had the college bound program and this one stood out to me in that they were willing to put their money where their mouth was in their approach.  Once a student chose this path, they worked hard with that student to make them successful, and so successful, that if the student who met the different requirements of that program who went on to college and needed any kind of remediation (catch up courses if they were not up to the college standard in a certain subject) the Rome County Schools would pay for their college education in full.  That’s right, they said if we did not prepare you for college we will pay for your college because we did not do our job!  They started that program over six years ago and up to the day we visited, they had never had to pay for a child’s college tuition!  Part of our presentation last week had to do with remediation rates in Arkansas, and how high they were.  Once again that goes back to not just getting students to meet certain performance criteria, its ensuring that they understand what they are tested over.  Its putting the student first!

I asked the folks there in Rome a very pointed question about the parent’s feedback about the three track position they took, and if they said that it should all be college bound, etc.  The resounding answer I got was that the community fully supported it, that the parents fully supported it, and it was evident to me when we visited Suzuki of North America, their only manufacturing plant in America, and I saw a lot of young people working there, having a great time, making money.  I saw what they talked about in action, and it was working.

 Our system in Arkansas has to put the people first, and most of all, our students.  See, they are the future workforce.  But what role do we play in shaping that workforce to meet our future needs of our largest, best, and brightest employers?  Are we doing a disservice to our companies by churning out what they don’t need, and putting our children in a position where they can not secure the work we told them would be there?  I say we are, and I say that we are doing an even greater disservice by not awarding the ambition that is found in every child, and that ambition does vary by degree with each child.  But as leaders and role models for these kids that are the future leaders in our community, we need to flesh out their passions, and facilitate those passions into a career for that child.  It may not benefit our higher educational institutions if kids opt to work after high school, or the various other routes.  It may not benefit employers if we don’t turn out more college grads.  But who do we want to benefit the most?  Ourselves, or the ones who will be working and being responsible for their own lives?  Our country was founded on ambition, and ambition has to return to everything we do or we will lose the one aspect that has been fostered and encouraged for over 200 years!  Every child has an ambition to be something, and instead of directing them to our ambitions, lets foster their ambitions and see how we can match them up with our employers so everyone wins.  Everyone will benefit from this approach, and our country will get back on track and in a direction that we were founded on; a country that allows the person the right to vote for who they want to, live where they want to, work where they want to, and to life, liberty and the pursuit of happiness!  

Coming Together During Difficult Times

There are unprecedented challenges that are facing us not only in our country but in our own community that we have never seen before.  There are questions that all of us have, answers that not many can produce, and anxiety that is everywhere in between.  There are several areas, locally, that are doing very good while there are others that are not doing good, at all.  The answer that is staring us straight in the face is that we should come together as a community and build each other up and not tear each other, or anyone one that we don’t know, down. 

As a community, we can come together and support each other in our own personal way.  I have talked in previous columns about shopping locally, having seminars that deal with a down economy, but I have not talked as much about a personal effort to see our community pull through this.  Some would say that this would be outside of the realm of economic development, and that it is outside of the scope of what I do here at the Chamber.  But what I believe about this is that consumer sentiment, or how you feel about the money you have (or don’t have) to spend, drives our overall economy and even our local economy.  Choosing to have a positive attitude is yours.  But by having a positive attitude, you can make very clear and very sound decisions.  By having a positive attitude, you will hopefully want to take a more active role in your community, and activities in your community.  By having a positive attitude, you can make a difference in a time where a difference is needed.

There are many aspects of our community that survive on philanthropic giving.  United Way, Big Brothers Big Sisters, John 3:16, and so many others.  Donations fund so many organizations in our community that do a lot to give back.  At a time like this in our country it is more difficult for us to give money that we want to save or not spend to organizations like this.  But that is counterproductive!  One of the biggest myths with businesses is when times get tough you tighten up and often times they tighten up on advertising.  Actually, you should cut others and increase your advertising!  The same goes for our community.  We need to continue and make an investment in our community through those organizations because what can not stop is our community from growing.  We can not let fear drive or create indecision, or worse, make us take steps backward towards the places we have worked so hard to come from.

Making investments in to our community is what will sustain us going forward.  Shopping locally will sustain us this holiday season and help our local community.  But so much of what we can do is what we do inside ourselves, and what we do so much of the time inside ourselves has a much greater impact sometimes than what we do outside of ourselves.  What we do in our communities, or what we don’t do, has a much larger price tag than we realize.  If we don’t keep doing what we do locally the impact of that is felt much more quickly than the trickle down from Washington DC.  There are ways that we can sustain ourselves locally and we do that by coming together as a community of friends ,neighbors, and co-workers.

I am reminded of a story when, in this country, there was a time that people after the great depression would share food, share all that they had, because they had nothing.  They had very, very little and people did all they could to help each other.  When they would slaughter a cow or pig for meat, they would share that with others.  When one would have excess in the garden, they would share that with others.  During one of the worst economic times, people came together and helped in ways that we can only hear about but for most of us have not experienced first hand. 

I have asked several people whom I respect and admire and have asked them what they see and how we will come out of this.  This is an economic downturn that we have never seen before, and one that they have not either.  There is no “economic” advice that will help any of us, comfort any of us, or relieve any of us.  But what I believe is that at this time of uncertainty, we can rely on each other and look to encourage and lift each other up in all that we do.  Whether you are at Church, at work, or at home, look to find ways that you can lift someone up out of their doldrums, and encourage them that this too shall pass.  Look for ways to be encouraging to others, to smile, give positive words of encouragement to someone who needs it.  Its contagious, and will spread to others and in some small way, maybe, and as a community we can build back our efforts while we build each other back up. 

What is going to happen to our local economy?

You are probably asking yourselves, your friends, and your co-workers what they think about everything going on right now in our national economy, and more specifically, here in our community.  Make no mistake about what is going on right now; its confusing, its worrisome, and its not anything that has an end in sight any time soon.  But what you can be reassured about is that like previous challenges to our economy in the past, we will bounce back and we will enjoy good times but we don’t know how long it will take for this to happen.

There are different stories from different angles depending on what you watch, listen to, or read.  Even what you are reading from me is an angle that you will have to determine if you believe it or not and if you will change anything you are doing.  Our faith in our elected officials may be low, and may not come back up in the very near future.  Our faith in what lies ahead is probably pretty low, too.  But our faith should not be low in ourselves, or the faith in the American People as a whole and our resiliency to bounce back from this very tough, very challenging time we are in.  Consumer sentiment is something that drives the outlook of our economy, and if you are not spending, that causes our economy to slow down because money is not flowing through our nation.  It may sound crazy for me to say this, but don’t lose your willingness to spend because of this uncertainty.  Don’t lose your faith that our economy will not bounce back.  Don’t you’re your positive attitude in favor of having a fearful attitude.  It has been said that the two things that drive our economy are greed and fear.  Low and behold, it has come true.  But something else drives our economy, and that is you and I, and what we do with our money.

This year, take some time and think about how you can help your local economy.  Before the Holiday Season really gears up and Walmart puts out its holiday items, consider spending locally.  There is some truth in how it is a little slow on the trickle down from what happens in Washington DC and its affect on us here in our community.  But every day we spend time and money in our community and can have a greater impact locally.  This Holiday Season, ask yourself what you can do to help each other out by spending here in our area.  Ask yourself if you can purchase things that not only is what your loved ones would like, but that you can buy it here.  You see, spending locally puts money back in to your pocket too.  It puts money in to your child’s pocket, in to your friends pockets, and in to everyone’s pocket.  Its also good business!  In communities across America, we have a golden opportunity to help ourselves more quickly while legislators and other officials try to see what they can do to help us and when.  Right now, there is no end in sight, and how all of what they are talking about will take place and when.  But we can do more locally and we can start getting ready for it now. 

The consequences of not doing this are very real.  Of the over 300 members we have here at the Chamber, 80% of those are small businesses that have 20 employees or less.  Small businesses are the backbone of our economy, both here in Independence County and across our country.  At times, a small businesses prices may be a little higher.  At times, a small business may not have exactly what you want either in size, color, or any other particular specification.  But what you can be assured about is that business owner, who has their retail store here in our community, has made a conscious decision to be in a community like ours, and they are investing their time and effort in a place that they love, and enjoy, as well.  Unfortunatley, no matter what we attempt to do some small businesses will fail during these tough times.  But what we can do is support as many of them as we can in what monetary way that we can.  

Our economic situation to some degree is in our hands.  We can make decisions and choices that will impact us positively, locally, today.  So as you are getting ready for the Holiday Season, as the weather starts to cool off, and as you think about things that matter to you most like your friends and family, consider how you can spend what you can afford locally, and that it will most certainly be a gift that truly keeps on giving. 

Surviving and Thriving in Difficult Economic Times

We had thought about using “Independence County Businesses AND the “R” Word” as the title of this article, but was reminded by some of my economist friends that the U.S. Economy is not  OFFICIALLY in a recession.  The agency responsible for making that call has yet to decide.  But whether the economy is in an official recession yet or not….  many business owners around the region are struggling with slowing consumer spending combined with higher costs, much due to transportation related costs brought on by higher fuel prices, and that is causing a big squeeze on their bottom line.  A number of business owners we have spoken to in the past three months have complained that fewer customers are coming in and those that do are spending less.  However, these same owners are seeing their cost of doing business increase and it is creating real problems with liquidity.

The bad news is… recessions happen.  The good news is… they are followed by renewed periods of economic growth, usually at even higher levels than before the recession.  IF the economy does go into a recession it will recover.  Since 1980 there have only been seven recessionary periods and they have always been followed by stronger periods of growth.   Of course if your business is the one that fails during that period it will not seem like a minor recession to you.  If the economy does slip into an “official” recession will it follow the same trends as the recent past?  Who knows?  Certain factors do make the current conditions a little more unique; the fact the country is involved in a protracted war that must be funded  and the ever increasing price of gasoline which will not be coming down could mean a different economic landscape once the recession does end.

Individually, Independence County business owners cannot do much about government spending, the war or even the price of gasoline at the pump, but there are actions they can take  to reduce the chance of becoming a casualty of the current economic downturn.  At the ASU Small Business Development Center, we encourage business owners to start by doing three things:

First:  Get your head out of the sand; quit wringing your hands and start planning.  Regardless of economic conditions, successful business owners should take some time each week to scan their environment, looking for clues from outside sources as to which way the wind is likely to blow in coming months.  Subscribe to and read information in your association newsletters and certainly read the business section of your local newspaper.  You can learn a lot about what may be coming just by looking for:

·         Monthly reports by big box retailers like Wal-mart and Target.  Consumer spending makes up 70% of this nation’s GDP.  If they start posting declines may be a good indicator for your business.

·         Watch the Fed (Federal Reserve) announcements about changes in interest rates.  The Fed does not drop interest rates because things are going well.  They drop interest rates because they see signs the economy is deteriorating and are trying to prop it up by making money cheaper to buy.

·         Watch state and local employment reports; more large companies laying off workers the less money is in your local area for purchases by those folks who lost their jobs.

·         Finally, pay attention to reports on inflationary moves.  When the prices for necessities such as food, clothing, and gasoline increase at a faster rate than wages, consumers feel they are less well off and will curtail spending accordingly.

None of these simple steps takes a degree in Economics but it can help a business owner “read the tea leaves” and start to make plans to adjust in response. 

Second:  It is time to take your marketing plan off the shelf.  The past economic booms have made many businesses lazy.  When consumer spending grew they were able to pick the “low hanging fruit”.  But when economic times get tougher, successful businesses know that survival means developing a marketing game plan.  All businesses are in the relationship business and smart entrepreneurs know this.  Marketing is not “Madison Avenue”; it is not just advertising or sales gimmicks.  Marketing is about developing and maintaining real relationships with your customers.  A recession is not the time for a “take it or leave it” approach to business.  There are hundreds of simple low cost, even no cost marketing techniques that any business can take advantage of that will sustain and even grow a business in tough times, but they have to take the time to learn.

Third:  It is time to take a hard look at the financial operations of the business, especially those that have a direct impact on cash flow and liquidity.  A knee jerk reaction of too many businesses in recessions is to take out the carving knife and start wholesale slashing of costs without regard to how that expense supports the business.  Too many business owners immediately cut advertising or wholesale lay offs of employees without regard to long term implications.  The key is careful review of all expenses and then careful decisions that cuts the FAT,  not the muscle of the business.   Other simple financial management tools include developing realistic inventory control plans, review of credit decisions to customers and developing good collection policies to ensure faster in flow of cash. 

In the mean time what can individual businesses do to survive, maybe even thrive during these times?  The Batesville Area Chamber of Commerce and the ASU Small Business Development Center have teamed up to offer a special workshop for area businesses called Growing Your Businesses During Difficult Economic Times, (Recession Proofing Your Business).  This workshop will be offered from 6-9:00 p.m. on Tuesday, October 14^th and again from 1-4:00 p.m. on Wednesday October 15^th at the University of Arkansas Community College in Batesville.  Call the chamber at (870) 793-2378 for more details.  The workshop is free to all area businesses thanks to contributions from The Citizens Bank, First Community Bank, First National Banking Company (FNBC), Liberty Bank of Arkansas and Arkansas Capital Corporation.

Economic downturns happen…it is a business fact of life, but proper prior planning can often make the difference between success or failure.  The Batesville Area Chamber of Commerce wants you to be a survivor and we can help.