Small Business Lessons from the Hottest Retailers

by Carol Tice

Small Business Lessons from the Hottest Retailers

It’s been an ugly year…for many small retailers, that is. When it comes to national chains, some have floundered, too. But a few have kept right on growing.

How did the hottest chains thrive despite the nation’s economic malaise?

Here’s a look at some of the success strategies of the retailers who made the National Retail Federation’s 2011 Hot 100 Retailers list for the fastest-growing companies based on 2010 vs. 2009 sales, as published in Stores magazine:

Diversify. Top winner Ascena Retail Group was formerly known as Dress Barn. In late 2009, it acquired two tween brands, Maurices and Justice to provide variety to its demographics, which historically ran to middle-aged women. This allowed the company to capitalize on growth in multiple apparel niches, including tapping into teens’ disposable income.

Combine low price with high perceived value. Fresh & Easy Neighborhood Market was able to grow its sales 38 percent with an emphasis on fresh, organic food delivered at lower prices. (This chain also has the benefit of deep pockets in driving its expansion — it’s owned by British conglomerate Tesco.)

Serve a growing niche. Bodega Latina is well-positioned in serving our nation’s growing Hispanic population with its El Super chain. The company saw more than 32 percent growth in sales, in part through expansion — it entered Nevada in 2009 and added four new California markets last year.

Be the coolest. Apple continued to develop in-demand products with its legendary design team and sell them in stores that are a design experience, too, while expanding its retail chain to over 300 units. Sales per square foot are a retailer’s dream at nearly $6,000 per square foot.

Think bargains, bargains, bargains. Discount-everything purveyor Overstock.com was hopping with a 24 percent increase in annual sales. It’s become so well-known it’s rebranding as simply O.co, as it plans more international expansion.

Small-Biz Loan Money Finally Trickles to Community Banks

by Carol Tice

Small-Biz Loan Money Finally Trickles to Community Banks

Talk about trickle-down economics.

With little fanfare, the U.S. Treasury Department finally began releasing funds from the $30 billion Small Business Lending Fund. That fund, which was authorized by the Small Business Jobs Act of 2010, was signed into law last September.

But only $123 million has been disbursed — and only just half-dozen community banks around the country have received funds last week.

The Small Business Lending Fund was created to help small businesses overcome lending challenges by providing capital to community banks with less than $10 billion in assets. Community banks are said to be better-equipped to make loans to small businesses because they tend to rely on relationships and may have a better idea about whether a business owner is a credible risk. Plus, these banks weren’t as exposed to home mortgages, which entangled so many of their larger counterparts.

Admittedly, this is the “first wave” of capital provided by the Small Business Lending Fund. As of the end of June, the Treasury Dept. had received 869 applications amounting to an $11.6 billion drawdown from the program. But seeing the trickle of funds coming through, one has to wonder: Is it too little — and too late?

No one quite seems to know. One thing’s for sure, it could have happened more quickly. Senators who pushed for the fund have been hopping mad over the foot-dragging for months. Back in May, Sens. Jeff Merkley (D.,Ore.) and Barbara Boxer (D.,Calif.) were writing Treasury Secretary Timothy Geithner basically pleading for the loan fund to be implemented pronto.

About two months later, the tap finally has started to turn, a move applauded by community bankers.

There was no announced schedule of when the rest of the money will be in bankers’ hands — only a vague statement from Treasury that additional announcements about the Small Business Loan Fund will be “made on a rolling basis in the weeks ahead.”

Uncle Sam’s New, $5M Incubator for Student Entrepreneurs

by Carol Tice

Student Entrepreneurs

A lot of great business ideas lurk in the halls and research labs of science and engineering schools at America’s colleges and universities. Now, the National Science Foundation (NSF) has formed a public-private partnership that will put $5 million toward getting more ideas out of the research phase and launched as successful business startups.

Here are the details:

The NSF’s new Innovation-Corps, or I-Corps, program plans to identify 100 great research-stage ideas in the coming year and give each training, support services, mentoring and $50,000 toward commercialization. The program’s goals: turn research into useful technology, encourage better collaboration between academia and industry and provide students more opportunities to learn about business basics.

The training program will be modeled after the groundbreaking Lean LaunchPad course taught for the first time at Stanford last spring. The course emphasized rapid testing of multiple hypotheses about the business using ample market research to find the most viable business model quickly.

Stanford lecturer Steven Blank, who created the LaunchPad class, is among the instructors for a planned I-Corps training class scheduled for October to December at Stanford.

“This is a potential game changer for science and innovation in the United States,” Blank wrote in a recent blog post. “And it will lead to more startups and job creation.”

Private partners in the new program include the Ewing Marion Kauffman Foundation and the Deshpande Foundation, which both seek to foster entrepreneurship.

There is a lot of incubator activity on college campuses already, and this new program may stimulate more private-sector programs.

For those interested in learning more, the NSF has set up a website with the program information and is holding monthly information Webinars on first Tuesdays. At a time when the federal government has taken heat for bailing out big banks with billions while arguably giving small businesses short shrift, the formation of I-Corps seems like a small, but positive development.

What the Dow’s Decline Means for Small Businesses

by Diana Ransom

What the Dows Decline Means for Small Businesses

Just when you thought the worst was over.

Yesterday’s 600-point plunge in the Dow Jones Industrial Average has businesses owners across the country scrambling. Some are moving around their retirement funds and drawing down their credit lines. Most of them, however, are holding tight and hoping for a better performance in the markets today.

The stock market’s dismal performance may not directly affect small businesses that don’t operate within the financial industry, but it does hit their customers. And if shoppers aren’t feeling very rich, you can guarantee that spending overall will ease, says Peter S. Cohan, the president of Peter S. Cohan & Associates, a management consulting and venture capital firm in Marlborough, Mass.

“Tack on reduced government spending and this is could be the one-two-punch that sends the economy into negative territory,” says Cohan who wrote Capital Rising: How Capital Flows Are Changing Business Systems All Over the World (Palgrave Macmillan, 2010).

Rohit Arora, the co-founder and CEO New York’s Biz2Credit, an online credit platform that connects small businesses with credit options, was even less optimistic. When the ratings agency Standard & Poor’s downgraded the U.S.’s debt from AAA to AA+ last Friday, the government’s lending costs jumped. That move will push up small business lending rates, as the price banks pay to borrow from the federal government will also rise, he says.

What’s more, if the nation falls back into recession, the government — thanks to its promise cut spending and reduce the nation’s debt — won’t be able to put forward new stimulus measures. “The payroll tax cut and other incentives that the government had considered renewing will [likely] go away,” says Arora.

Such prospects are no doubt rankling still struggling small business owners. For Irene Firmat of Full Sail Brewing Company, the uncertainty is the worst. “Economic uncertainty and rampant unemployment is scary,” says Firmat, who founded the brewery in Hood River, Ore., in 1987. “We have a pub that does a lot of volume from people in Oregon. But we also get many people coming from all over the U.S.; they have to pay for gas or airlines tickets,” she says. “If you’re not scared you shouldn’t be a business owner.”

Although the extent of the market’s decline will largely determine the level of damage the U.S. debt downgrade has wreaked, some potential bright sides may shine through, says Arora. Oil and commodities prices could remain subdued if the market’s turmoil spreads, he says. In addition, if the dollar continues to decline, exporting abroad could become increasingly attractive, as U.S. products and services become cheaper to foreign buyers.

Want to attempt some contingency planning?

See: What a U.S. Default Might Mean for Small Businesses.

Want to stage a business comeback and prosper in good times and bad?

See: Shift Your Mindset, Save Your Business.

How about reduce stress?

See: How to Stop Stress in 60 Seconds or Less.

How to Compete If Your Job Market Is Rebounding

by Carol Tice

How to Compete If Your Job Market Is Rebounding

An economic downturn is never the same everywhere. Some cities can be devastated, while others can amble along nearly unscathed.

In some U.S.cities, hiring has begun to grow again, the SurePayroll Small Business Scorecard shows. The July study from the payroll-service provider shows big differences in hiring trends in different markets.

Overall, hiring is down 2.4 percent year-to-date, SurePayroll reports. Paychecks have stayed fairly stable, though — down just .3 percent.

Where are businesses beating the odds and hiring new staff? Here’s a look at the top five markets for hiring in 2011 through last month, among the 35 largest U.S. cities:

Top Five Cities Hiring By Number of New Employees

  1. Orlando, Fla. 4.7%
  2. Greensboro, S.C. 3.5%
  3. St. Louis, Mo. 2.8%
  4. Charlotte, N.C. 2.6%
  5. Tampa, Fla. 2.6%

I think it’s notable that these are nearly all southern states and right-to-work states with low hourly minimum wages. No surprise hiring is picking up here first.

If you’re in a market where hiring is getting competitive again, how can a small business get top talent?

Knowledge is power. Find out what other businesses are offering candidates, so you can be prepared to talk about your strengths.

Offer flexibility. Many seasoned pros are looking for flexible work situations — the ability to work four 10-hour days, or to work early mornings, or to job-share and work half-time.

Think perks. You may not have the best salary, but you can make your business attractive in other ways. How about an office with a window, or free lunch once a week?

Train and promote. If you’re willing to teach new skills, you can attract candidates looking to add to their knowledge. If you can promote workers in a short timeframe when they excel, stress that angle. In large corporations, it’s hard to get the head honcho’s attention, where with a small business, they may be able to work directly with the owner, learn more, and move up faster.

Five to Follow on Twitter for Upcycling

by Kara Ohngren

Five to Follow on Twitter for Upcycling

Scott Hamlin doesn’t believe in waste.

To prove it, in 2009, Hamlin co-founded the Portland, Ore.-based Looptworks, an online-apparel company that makes limited-edition jackets, hoodies, skirts, shirts and graphic tees. But here’s the twist: All of Looptworks’ products are made from (gasp!) “upcycled,” or excess manufacturing fabric and materials.

Hamlin (@Looptworks) uses social media to boost the awareness and tout the benefits of upcycle, or “closed loop” manufacturing. He hopes more people will think about what they buy, where it comes from and what natural resources are required to produce it.

Here are his top five Twitter streams to follow for the latest upcycling news, tips and information:

  1. @TerraCycle
    Followers: 9,328
    Tweets: 2,360
    Trenton, N.J.-based TerraCycle’s purpose is to eliminate the idea of waste entirely. The company, which was founded in 2001 by Tom Szaky, turns hard-to-recycle waste like potato-chip bags and computer equipment into new-again products. More than 20 million people currently collect waste in 11 countries for the company to upcycle. The Twitter stream is full of industry trends and links to upcycled goods.
    Sample Tweet: Check out great upcycling contest by @methodtweet and @dwell http://bit.ly/jeucy9
  2. @billmcdonough
    Followers: 5,534
    Tweets: 297
    Through his book Cradle to Cradle: Remaking the Way We Make Things, William McDonough brought the term “upcycling” to the mainstream. McDonough is also the founding principal of William McDonough + Partners, an architecture and community design firm in Charlottesville, Va., that focuses on ecologically-, socially- and economically-minded architecture and planning. He primarily tweets news about eco-friendly companies and closed-loop manufacturing.
    Sample Tweet: What a pleasure to spend time with the savvy team at @Method today in SF– they are Cradle to Cradle believers, focused on “more good”
  3. @wornagainUK
    Followers: 596
    Tweets: 59
    Since 2005, Cyndi Rhoades’ London upcycling company Worn Again has made designer products from corporate waste materials. The company’s motto? “Some things are just too good to go to waste.” Worn Again’s Twitter feed offers tips and news about new technologies and emerging trends within the closed-loop movement.
    Sample Tweet: “A stepping stone to closed-loop” – Upcycled @EurostarUK bags from uniforms by @wornagainuk: http://bit.ly/ksvT7I
  4. @etsy
    Followers: 1,402,498
    Tweets: 12,026
    “Etsy is the original hub and community for upcycling artists,” Hamlin says. Since 2005, the Brooklyn, N.Y.-based mega, online mall for all things crafty, handmade and vintage has become something of a mecca for refurbished goods as well. The company’s Twitter stream consists of tips and advice for both buyers and sellers on the site, as well as green biz and upcycling news.
    Sample Tweet: Upcycling a revolution. http://etsy.me/lOZs5w via @shareabledesign
  5. Reuse Alliance
    Followers: 1,082
    Tweets: 716
    MaryEllen Etienne is the co-founder and executive director of Reuse Alliance, a New York-based non-profit that promotes the benefits of reusing waste. The organization aims to educate the public about the social, environmental and economic benefits of reusing goods. Etienne tweets the latest green business news and loads of interesting upcycled products.
    Sample Tweet: You Can Hang Ten on Artist Rich Morrison’s Upcycled Beer Can Surfboard: http://bit.ly/mUnjkH via @Inhabitat #reuse #fb

Seven Business Turnaround Tips from ‘Bar Rescue’

by Carol Tice

Seven Business Turnaround Tips from Bar Rescue

Has your once-great business lost its mojo lately? That was the case for Downey’s Irish Pub & Restaurant, a storied Irish bar in Philadelphia that recently was the subject of an episode of the Spike-TV series Bar Rescue.

After being acquired by top Italian chef Domenic Centofanti, Downey’s went into a slide. When Bar Rescue’s bar expert, Jon Taffer, toured the joint, he found a long-dead mouse lounging in the top of the brick pizza oven hood. The conditions were filthy, the food nothing short of a health hazard. Revenue had slid and the business was $3 million in debt.

The story of Downey’s turnaround provides a road map for any business looking to rebuild.

Lessons learned:

Find a no-bull expert — then, listen up. Taffer about rips Centofanti’s head off over some of the discoveries he makes. “You’re a professional chef?” Taffer barks after finding meats left out at room temperature. “Shame on you! You might be a great chef, but you’re a lousy manager.” A willingness to hear the naked truth about what you’re doing wrong is the first step down the road to improvement.

Be clean and uncluttered. It doesn’t cost money to keep your place of business spotless and haul away clutter. Taffer targeted the overstuffed “trash room” at Downey’s, which was crammed with old boxes and other junk, sitting right next to an uncovered bin of uncooked French fries. Yuck!

Drink your own Kool-Aid. At one point an Irish chef brought in to help revamp the menu makes Centofanti taste each of his appetizers. They’re vile, and he didn’t even know.

Share your recipe. One of the reasons the dishes had gone off was that Centofanti kept his recipes in his head, and hadn’t create a recipe book for the other cooks to use — so the dishes varied, often for the worse. Make sure your entire staff knows how to create exactly the customer experience you want.

Don’t give up. A death in his family put Centofanti into a depression, and he let it affect his attitude at work. For too long, he just didn’t care. If you can’t keep your mind on business, get help until you’re back on your feet.

Boost your visibility. Downey’s was given an exterior signage upgrade that made it the clearly visible hub of its neighborhood.

Find an angel. In the end, Downey’s was really saved by the magic of television. The show poured likely hundreds of thousands into a makeover for the bar, including new chairs, floor refinishing, and a new commercial stovetop and walk-in cooler. If your business is too far gone, it may be time to look for an investor who can put in the capital needed for a turnaround.

If you need more help growing your retail business, this show comes with a bonus. The producers have teamed with SCORE (formerly the Service Corps of Retired Executives) to provide a toolkit with dozens of links to resources, live events, and other support.

Wix.com Helps You Mint Mobile Sites

by Jonathan Blum

Wix.com Helps You Mint Mobile Site

Having a traditional online storefront isn’t enough anymore. As customers cling to their smartphones with greater enthusiasm, having just an average business website — if it isn’t already — may start losing you sales.

Tel Aviv-based Wix.com is offering a possible solution: As of last week the company, which also has offices in New York, is offering a do-it-yourself website development tool aimed at the mobile Web.

Wix’s basic services are free. You can design a website and publish it to a Wix.com address for free, but you’ll have to pay subscription fees, ranging from about $5 to $16 per month, to do things like link the site to your own domain or remove Wix’s advertisements.

We’ve given the pre-release demo of the product a quick once-over and spoke with company management. Here is what you need to know if you’re considering launching your own mobile website:

What it is: Founded in 2006, Wix specializes in DIY Web design. Its new mobile site tool creates content for mobile devices like the iPhone and, to a limited extent, the iPad. Wix’s mobile website builder uses simple templates and editing tools that deliver mobile Web basics: a home page with the site name and an image, plus a list of pages with additional content such as photo galleries or lists of services. A preview sidebar shows how the changes look as you go.

The bare-bones approach is intentional, says Wix CEO Avishai Abrahami. The company’s initial idea was to move users’ existing Wix websites to mobile devices, but the idea was a flop with beta users who favored more compact, to-the-point mobile sites.

Why you might like it: It’s ridiculously easy to use. We created a live mobile website within, no exaggeration, minutes. There isn’t much to it — you can edit text, upload images and change the site colors — but the tool includes mobile must-haves like the click-to-call and click-to-text buttons, which let mobile users reach you right away.

Why you might not like it: One word: Flash. Wix’s traditional Web-development tool is based on Adobe’s programing environment, called Flash, so your Web customers need to use a device that supports the language to see your site. Most PCs do, but many mobile devices do not; Apple’s iPad is the best known. Wix uses more Web-friendly development languages for its new mobile tools, but the Flash-based approach still causes problems. Wix mobile sites do well in small format devices like the iPhone, but look frankly unprofessional on the bigger iPad screen.

Bottom line: As a low-cost entry to the mobile Web, Wix offers some interesting options for small businesses. Although the Adobe Flash-based site editor might be a deal-breaker for some users, the service is worth a look. There is no harm in having a quick and easy-to-make mobile site.

How Business Owners Can Shake the Summer Doldrums

by Carol Tice

How Business Owners Can Shake the Summer Doldrum

Feeling stuck this summer?

If business is slow, there are two things you can do about it: Sit and stew or get out and learn more about how to grow. If the latter interests you, consider the many free and cheap opportunities to break out of your rut and brainstorm with other business owners coming this summer and into the fall.

Look around for a local summer networking event taking place in your town — and if nothing of note is planned, you can always invent your own event. That’s what BarCamp is all about.

Founded in Palo Alto, Calif., in 2005, BarCamp is a free, ad-hoc unconference shaped by the participants. BarCamp is a global movement, and anyone is free to participate.

If there isn’t a BarCamp planned for your area, just find a venue and invite local business owners. All you do is create your own schedule, choose your topics and make it as long or short as you like.

Some BarCamps pull in all different types of businesses such as the upcoming BarCamp planned for Grand Rapids, Mich., on August 19th and 20th.

Other BarCamps focus on a specific industry or business type. For instance, HealthCamp SFBay in San Leandro, Calif., will bring healthcare-industry business owners together in September. Other BarCamps in the past year have focused on freelancers, the mobile industry, Linux, social innovation and cloud computing.

If you’re just trying to get your business off the ground, there’s the day-long ManUp Entrepreneurship Bootcamp, which promises you can “come with a dream, leave with a game plan.” The next bootcamp takes place in Tulsa, Okla., Sept. 10, with additional camps in the planning for Oklahoma City, Dallas and Denver. Tickets are $97.

Entrepreneurs Ask: Will the Downturn Ever End?

by Carol Tice | 5

Entrepreneurs Ask: Will the Downturn Ever End?

The past week was enough to rattle even the most optimistic small business owner.

The stock market tanked as the debt-ceiling debate dragged on, and didn’t let up even after an agreement was reached. Then ratings agency Standard & Poor’s downgraded the U.S.’s debt rating, and all heck broke loose in the financial markets: The Dow Jones Industrial Average plunged 400 points on Monday — forcing the Fed on Tuesday to make an unprecedented promise to keep its key short-term interest rate near-zero through 2013. Stocks shot up, as a result. Today, however, those gains have all but disappeared.

It’s a bit like being on a Tilt-a-Whirl ride. The worrisome thing is, if the stock slide turns into a prolonged malaise like we saw in 2008, little can be done to stop a major economic implosion.

Many of the strategies the federal government can put into play to try to stabilize the economy and encourage job growth were done long ago. The U.S. Chamber of Commerce called it “the worst-performing recovery in the post-WWII era” even before last week and notes that, at this point, we’d have to create nearly a half-million jobs every month to return to pre-recession employment levels a year from now.

All of which raises the question: Will the downturn ever really end, or is this the new normal?

It’s hard to tell whether it’s just a crazy week or the start of another round of stubborn economic doldrums. Prior to this week’s rollercoaster ride, business owners were already in a pretty cautious mode. A recently released National Retail Federation Study showed retailers are anticipating shoppers will spend slightly less on the critical back-to-school season than they did last year.

In other words, retailers were betting against a rebound in consumer confidence even before last week. Along the same lines, the July Ceridian-UCLA Pulse of Commerce Index released today, which tracks the volume of merchandise being shipped, was down a hair, also on weakness in back-to-school.

What’s more, traditionally bold venture capitalists are growing fretful, too, the Silicon Valley Venture Capitalist Confidence Index shows. And six in ten companies wishing to pursue initial public offerings this week have canceled their plans.

To sum up, this boat’s bobbing on choppy seas, not sailing ahead. What can you do while we wait for tailwinds to pick up? Here are three ideas:

  1. Don’t panic. The stock market has been having dramatic mood swings lately. And while many money managers are calling for continued volatility, knee-jerk reactions have rarely worked out well for investors and entrepreneurs. Instead, it’s best to stay the course in your own retirement portfolios and renew your business focus, too. After all, this is could simply be a case of temporary insanity, and the markets will soon calm down.

    Related: How to Stop Stress in 60 Seconds or Less

  2. Use it in your marketing. If you were planning a sale or a nightly dinner special, maybe you could come up with a clever name: Stock Market Jumble Sale or Debt Debacle Deal.

    Related: Why Experimental Marketing May Be For You

  3. Don’t watch. Turn off the TV and focus on your business. Concentrate on the things you can control.