Small Business Labs

Americans Donated $370 Billion to Non-Profits in 2012

Americans are a generous people. According to the Atlas of Giving they donated $370 billion to charities of various types in 2012.  This is up 6.7% from the prior year and well above what it was a decade ago.

   

One reason for this growth was an increase in "mega gifts" and the impact of increased donations by people concerned about tax code changes eliminating charitable deductions.  Key quote from the CEO of Atlas of Giving in a Barron's article:

"The philanthropic sector’s 2012 growth of 6.7% was remarkably strong, he says, in no small part due to Warren Buffett’s and the Bill and Melinda Gates’s charitable push, The Giving Pledge. It resulted in a bumper crop of  “mega-gifts” last year. The Giving Pledge is, of course, the public commitment by America’s wealthiest to give more than half of their entire wealth to charitable causes."

Because so many raised their contributions in 2012, charitable giving is expected to see a more modest 1.3% increase in 2013.

This giving supports the very large non-profit sector which employs almost 11 million Americans.

Part-Time Employment Keeps Growing

Last fall our article Are We Becoming a Part-Time Nation covered the trends leading to the growing number of part-time workers in the U.S.  

The recent New York Times article The Rise of Part-Time Work covers some of the same ground.  Key quote:

"Compared with December 2007, when the recession officially began, there are 5.8 million fewer Americans working full time. In that same period, there has been an increase of 2.8 million working part time."

Driving the growth of part-time work are part-timers that would prefer to working full time.  The BLS call this group part-time for economic reasons. They are part-time because they can't find a full time job or because of slack business conditions.

As the chart below from the NY Times shows, their numbers have grown 3.4 million since the beginning of the recession.  

  

February's job report continues this trend. While the overall report was quite good (at least by comparison to those of the last few years), a big chunk of the increase was in part-time work.

As we pointed out in our prior article on this topic, a number of trends are driving the increase of part-time work.  Expect to see more part-timers in the coming years.  

What's a Cicerone? (hint - it involves beer and coaching)

A cicerone is the beer industry's equivalent of a wine sommelier.

Cicerones provide expert advice on the selection, food pairing and serving of beer.  

There's even a professional certification program for these beer experts.

According to the research firm Euromonitor's Key Beer Trends for 2013, cicerones are becoming increasingly influential.  

Key quote:

"... the brave new world of craft and specialty beer surely needs its own ambassadors, experts, rituals and paraphernalia. Cicerones - sommeliers’ equivalents for the increasingly sophisticated beer world - will become flag bearers for the logical conclusion of the craft beer revolution, educating discerning drinkers as ales, bitters, Weiss beers, porters and stouts keep on stealing the limelight from lager."

This is yet another example of the growth of personal services and coaches, the rapidly growing job segment of people who help time constrained consumers navigate increasingly complex lives.

And let's face it, things have gotten complex when we need help with the "rituals and paraphernalia" associated with beer.  I didn't even know beer had paraphernalia.  

Many Americans Planning to Go Freelance

As part of the MBO Partners State of Independence study a national, statistically significant survey of adult (ages 21+) Americans is conducted.  One of the questions asked is:

"How likely is it that you will be an independent worker (without a permanent employment arrangement) or own your own business in the next 24 months?"

Earlier in the survey the term independent worker is defined to include freelancing, temping, self-employment, etc. 

As you can see from the chart below, 14% responded probably/definitely in 2011 and 13% responded probably/definitely in 2012.  This projects out to about 26-28 million Americans saying each year they probably or definitely will become independent in the the next 24 months.  

    

It's important to note that aspirational questions like this usually result in much higher positive response rates than actually happen.  We're forecasting that the number of independent workers will grow by about 3-5 million over the next 2-3 years.  

But these numbers tell us that many Americans see independent work as a viable alternative to traditional employment and a path they are aware of and considering.

Corporate Training Exploding and Changing

Interesting article on Bersin by Deloitte's site on corporate training.  As the chart below (from the article) shows, after a steep decline during the recession U.S. spending on corporate training has strongly rebounded.

 
The reasons given by Bersin for this shift towards investing in training are:

1. The need for specialized skills is increasing. 
2. Workforce education and skills have atrophied.
3. Leadership development and succession management have become critical business needs. 

Companies are also shifting to online and informal training.  Key quote from the article:

This year companies grew their “informal learning” spending by 39%, demonstrating a steady shift toward social learning tools, knowledge sharing, expert directories, and other forms of information sharing. Mobile learning is now becoming mainstream ... companies have settled into a world of one-third instructor-led and two-thirds technology enabled training.

This is good news.  For the last few years we've consistently heard complaints from everyone that companies are no longer interested in training employees. Hopefully this view is changing.

Partners in Love and Business

In celebration of Valentine's Day, Manta conducted a survey on small business owners who work together with their spouse/significant other.

The quick summary is Mom and Pop shops are alive and doing well.  

Their survey shows that roughly 25% of small business owners work with their spouse/significant other. This works out to between 4 and 5 million businesses. That's a lot of Moms and Pops.  

61% of the small business owners who responded said they were married and 13% said they were in a relationship. This means about a third of those who are married or in a relationship work with their spouse/significant other.

In terms of how it's working out, 57% of the respondents said they would recommend working with a spouse/significant other. 43% said they would not recommend it.

An interesting unanswered question is how many small business owners with spouses are working with a significant other.  Maybe Manta will get to that during National Divorce Week.  

Emergent Research is a Mom and Pop shop I definitely would recommend it. Yes, there are challenges along the way.  But you also get to share more of your lives with one another.

Showrooming Taking a Bite Out of Local Businesses

The Institute for Self-Reliance recently released a survey of local businesses. One topic they covered was showrooming and as the chart below shows, it's having an impact on local retailers.

   

As we pointed out last year, showrooming is just starting to reach a tipping point and its impact on retailers will substantially increase over the next couple of years.

We think showrooming will also expand beyond retail price checking - customers of all types of business will increasingly use showrooming tactics to find better prices.  

Showrooming is the opening salvo in a big data driven war for customers. This war will intitally be fought in the retail industry with Amazon, WalMart and other large retailer battling each other as well as local businesses.

But we expect this war to quickly expand to other industry sectors. Transparency in a digital world is too powerful a trend for it not to.

The Two Sides of the Temp Economy

The NY Times article The Rise of Permanent Temp Economy provides an interesting look at the history of temporary work in America. 

The author argues the temp industry in America was created by exploiting gender stereotypes in the 1950s and 1960s.  Key quote:

To avoid union opposition, [temp agencies] developed a clever strategy, casting temp work as “women’s work,” and advertising thousands of images of young, white, middle-class women doing a variety of short-term office jobs. 

The strategy worked and early temp leaders (like Kelly Girls) were able to establish  "a new sector of low-wage, unreliable work right under the noses of powerful labor unions."

The article goes on to argue that temporary jobs are bad jobs that don't provide adequate salaries or protection from abusive employers.  

This view - that all temporary jobs are bad - is common in academia, which is the profession of the author.  

And I agree many temp jobs are bad. The Center for Progressive Reform's At the Company's Mercy: Protecting Contingent Workers from Unsafe Working Conditions does an excellent job of chronicling some of the worst examples of temp worker exploitation.

But there are two sides of the temp economy. As shown by the MBO Partners State of Independence studies, over half of all independent workers are satisfied with contingent work and the vast majority plan to stay independent instead of seeking traditional employment.  

Also, about 2.2 million American independent workers earn more than $100k per year. Needless to say, this group doesn't feel exploited. 

As a society we need to fix the problems that exist with temporary work. But we also have to remember that temporary work has its advantages for both employers and employees and many temps prefer this style of work over traditional jobs.

The Rise of Coaching as a Business

Regular readers know we've long been fascinated with the growing number of personal services jobs and businesses.  These are firms and people that provide life support services to increasingly harried, time-constrained and often affluent consumers.

Personal services cover a wide range of services - everything from dog walkers to massage therapists to financial planners.  

But one of the fastest growing sectors is coaching.

There are paid coaches for all sorts of fields. There are obvious ones, things like sports, music and college coaches for kids.

There's also personal trainers, who mostly work with adults. There are about 230,000 of them in the U.S. and it's one of the nation's fastest growing professions.  

There are also less well known coaching fields. One of my favorites is life coaching. These folks coach you on how to live your life. You might ask how does one become a life coach? Well, one way is to hire a life coach coach, which is someone who coaches you on how to be a life coach.

Dating coaches is another interesting category.  There are dating generalists who can help in a variety of ways as well as specialists who focus on specific areas like online dating. And in case you think dating coaches are only for losers, actress Katie Holmes (Tom Cruise's ex) reportedly hired a dating coach.

In fact there are few fields or areas of human endeavor that don't have coaches. 

We expect the coaching industry to continue to grow and thrive. Time and expertise have become the key commodities of the 21st century, and coaches help with both. Because of this, demand for coaches will continue to rise.

Is Traditional Retail Dead?

A recent Pando Media article quotes noted VC Marc Andreessen saying traditional brick and mortar retail will be dead within the next the decade. 

And by dead, he means really dead - as in we will do all our shopping online. Key quotes from the article:

“Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice … Retail chains are a fundamentally implausible economic structure if there’s a viable alternative. … Malls are going under, and there’s more to come. These chains are much closer to going under than you think.

This is obviously hyperbole from a guy and media outlet that both like hyperbole. 

There's no doubt online commerce is fundamentally changing where and how we buy. And these changes are putting tremendous pressure on brick and mortar retailers. But traditional retail is not going to disappear anytime soon.  

According to Forrester, retail is about a $3.1 trillion industry in the U.S., with ecommerce comprising about 7% of the total.  They are forecasting by 2016 ecommerce's share of retail will be about 8.6% of the total.  That's a long way from 100%.

What is clearly happening at a rapid pace is the blending of traditional and online retailing. This is being driven in large part by the rapid growth of in-store smartphone usage and showrooming.  

Pando Media's less sensationalized article "Showrooming" and the blurring line between physical and digital retail does an excellent job of describing this shift.  Key quote:

"It’s clear that the main battlefront of the digital shopping wars is going to be stores, not pure-play e-commerce. It’s in the stores, where digital has barely begun to take hold, that we will see the most massive innovations in the next few years."

So we may see the end of traditional retail. But it's replacement will likely not be online commerce by itself. It will likely be blended shopping environments mixing both online and real world shopping.

This makes much more sense to me when you factor in the growing role experiences are playing in shopping. Even in a digital world, people - and especially younger people - value real world experiences. As long as this piece of human nature is true, real world retail will continue to exist.