Small Business Labs

Telecommuting Continues to Grow; Not Everyone Happy

Reuters has a story, which I read on CNET, called "Telecommuting not so great for those left in office."  The article is about a study showing that people in companies with a lot of telecommuters who are not telecommuting are dissatisfied.  Key quote:

"When a number of their co-workers toil away from the office by using computers, cell phones, or other electronic equipment, those who do not telecommute are more likely to be dissatisfied with their job and leave the company, said Timothy Golden, a management professor at Rensselaer Polytechnic Institute."

The article also points out that telecommuting continues to grow:

"Telecommuting has been a growing trend in the United States since about 2000. About 37 percent of U.S.-based and international companies now offer flexible work arrangements, with the number of those programs growing at a rate of 11 percent per year, according to the Society of Human Resource Management."

Harvey Mackay on Small Business Technology

Harvey Mackay is the well known author of the NY Times best seller "Swimming with Sharks" and other books.  He also has a syndicated newpaper column.  His most recent column is about technology and small business.  Key quote:

"The tools of business have been reinvented overnight. The single biggest change in those 2 1/2 years is the invasion of technology into the world of small business."

The column goes on to give multiple examples of technology being used by small businesses.  He ends with pointing out that technology provides tools for small business, but small businesses need to keep focused on their products and customers:

"The Internet is like the computer was before it. Both are tools. They can revolutionize how you administer and publicize your business, regardless of the size of your bottom line. But there is no substitute for the product. Stay abreast of the trends, but stick to the business of keeping your core products and services competitive."

We are seeing signs of an emerging digital divide in the small business sector.  In our work we keep seeing small businesses that are making substantial business gains through the use of technology - often at the expense of their less tech enabled competition.  As Mckay points out, technology is invading the small business sector and small businesses need to be aware of it.

Career Builder on 2008 Workplace Trends

Career Builder has an interesting list of 8 workplace trends for 2008.  Several of them caught my eye:

#2 More Flexible Work Arrangements
Sixty percent of employers report they currently offer flexible schedules to employees and 39 percent plan to provide more flexible work arrangements in 2008.

#4 Rehiring Retirees
Nearly three-in-ten employers (29 percent) report concern over the loss of intellectual capital at their organizations as a large number of Baby Boomers approach retirement age.

#6 Freelance or Contract Hiring
Employers are turning to freelance or contract workers to help support business initiatives as they monitor their pace in recruiting permanent employees.

The interest in hiring freelancers and contractors continues to grow and continues to create more opportunities for personal businesses.  The impact of retiring boomers on corporations is becoming clearer and many large corporations are starting to put in programs to try and keep these employees.  Flexible work arrangements are certainly part of the solution to this corporate problem. 

For more on this topic, George's Employment Blawg has a list of lists of workplace trends.  I first saw this post on My Venture Pad, which is a group blog on small business. 

$2500 Cars and Small Auto Companies

The Indian company Tata annouced their $2500 auto last week.  The International Herald Tribune has an excellent article on the manufacturing changes required to make a $2500 car.  Key quote for IHT article:

"Just as Japan popularized kanban (just in time) and kaizen (continuous improvement), so Tata may export to the world what can perhaps be called "Gandhi engineering" - a mantra that combines irreverence toward established ways with a scarcity mentality that spurns superfluities."

The article goes on to talk about how Tata dramatically cut the costs of making a car.  In addition to cutting "superfluities" (had to consult a dictionary to learn this basically means "extras'), Tata also outsourced a lot of the work and used new low cost tooling and equipment.

Related to this is the recent annoucement of the Air Car by a small European auto company.  It runs on compressed air and is built in a factory that employs less than 50 workers. 

I've posted in the past on the growing number of small auto companies.  The numbers continue to grow.

Tata announcement

http://www.news.com/2300-11389_3-6225465-1.html?tag=nefd.pop

Air car

http://www.theaircar.com/MiniCats.html

Half of All Small Businesses Owners 50+ Years Old

Yahoo Finance has a special section on boomers and retirement called the new retirement.  There are multiple articles on the subject taken from several sources (Forbes, Kiplinger, etc.).  One of the articles discusses boomers starting small businesses.  Key quote:

"Since 2000, people ages 50 to 62 have been the fastest-growing group of new entrepreneurs. The 50-plus crowd now accounts for about half of all small-business owners, according to the U.S. Small Business Administration."

We've been following this trend for some time now (see The Changing Face of Entrepreneurs) and expect boomers to continue to form small businesses at increasing rates as they move through their  fifties and early sixties.

For more posts on boomers and small business, visit our boomer tag page.

The Consumer Electronics Show - Mobile Devices and Location Services

The annual Consumer Electronics Show (CES) was in Las Vegas last week.  I spent a couple of days there talking to companies and visiting exhibits.  We believe mobile computing and location services are going to have a huge impact on small business, so one of my primary goals was to see what was new in these areas.  Two things struck me:

1.  Automotive navigation systems are rapidly moving from just providing maps and directions to also providing deep local content -  Lots of innovation in the automotive navigation space, with most of the innovation around adding location based services.  Navi systems are increasingly providing detailed information on local businesses as well as directions. 

The device making the most waves is the Dash, which is expected to ship in Q1 of this year and is already in beta.  It provides 2 way Interenet access and a wide range of location information and content.  It also provides updates on the speeds of other Dash equipped cars giving a much more accurate view of traffic conditions (at least in areas where there are enough Dash equipped cars).

Automotive Design Line magazine has a nice article on this trend, and we cover in it more detail in our Future of Small Business technology forecast report.  The growing impact of cars as mobile computing devices is way underestimated in my opinion. 

2.  Mobile computing was a major focus of this show - While a lot of press went to giant TV's and systems for getting video and Internet access connected to the living room TV, mobile computing was a clear major show focus.  Lots of new cell phones, notebooks, sub notebooks and new hand held and mobile computing devices.  Again, Internet access and location based services were the main driver. 

Too much in this area to cover in this blog.  If you are interested in details on CES and mobile devices take a look at CNET, Engadget or Gizmodo. 

The bottom line is local, location based services are going to rapidly become mainstream over the next 2 years.  Customers are increasingly going to be equiped with full mobile Internet access and tools for quickly finding detailed information on local providers of goods and services.  This trend is being driven both by the mobile device companies and by Google and Yahoo who are rapidly improving their local search capabilities.  For more on local search in 2008, take a look at Local SEO's 2008 Local Search predictions.

The Consumer Electronics Show and Small Business

The Consumer Electronics Show (CES) is a huge event (140,000 attendees) with every major electronics company in the world participating.  It is also an industry only event - consumers are not invited and in theory not allowed in the show.

I spent two days at the show last week, which is only enough time to see a very small portion of the show.  For those interested in deeper coverage, I suggest CNET, Gizmodo or Engadget.

From a small business perspective three things hit me:

1.  There were thousands of small companies participating at CES and most of the interesting "new stuff" came from small businesses.  Based on the reactions of the people I talked to, by far the best part of the show was the Innovators section which mostly consisted of very small booths (many just desks) showing the work of very small companies and individuals.

Entrepreneurial spirit is very strong at CES.  On my flight to Las Vegas I sat next to a truck driver who had invented some sort of iPod after market product.  He was going to CES in search of business partners.  At the show I heard roughly this same story mulitple times.   

2.  New technology continues to enable small businesses and allows them to enter markets and industries that used to require the resources of much larger corporations.  I spent a few minutes looking at the latest Brother sewing machines. 

For those of you who haven't kept up with sewing machines, they are now computer controlled work stations and you can even sew copies of digital images on things.  While this technology has been around for quite awhile, for around $1700 you can buy machinery that cost hundreds of thousands of dollars as recently as the late 90's. 

3.  Large corporations are increasingly looking to partner with small businesses.  I saw a lot of examples of this at the show with large corporations courting small businesses to add them to their "ecosystem" -  either through acquisition or partnership. 

I posted separately on mobile computing and location based services.

Update on Plenty of Fish - 2 Employees, $10 Million in Revenue

Last May I posted on the dating site Plenty of Fish.  The post was called "1 Employee, Millions in Revenues.  The NY Times has an article on Plenty of Fish and it is now 2 employees and $10 million in revenue. 

The article also talks about Craigslist, which has a very large dating section.  Key quote:

"Craigslist’s personals draw about six million unique visitors a month, more than any other dating site, and its listings for all categories generate 10 billion page views a month. It covers 450 localities in 50 countries around the world — with only 25 employees."

Obviously a lot can be accomplished by small online businesses.

NY Times on Open Source Hardware

The New York Times has an article on the Neuros Technology media recorder.  The product is called the OSD and is an example of the growing trend towards open source hardware.  Key quote:

"The company, based in Chicago, is providing full documentation of the hardware platform for its recorder, the Neuros OSD (for open source device), so that skilled users can customize or “hack” the device — and then pass along the improvements to others."

While open source hardware is designed for hackers and hobbyists to play with, the hardware is also designed to create platforms that other companies will use in their products.  Other examples of companies pursuing this strategy are Chumby and Bug Labs. 

Open source hardware will allow small businesses to easily modify or incorporate electronics into new or existing products.  This will create new opportunities for small businesses.

The O'Reilly Radar blog has more on this article and open source hardware in general.

Teaching Boomers to Play the Piano

We continue to track the growth of personal services firms, which are businesses that provide support services and instruction to consumers.  A major sector of personal services is teaching kids.  This sector includes small businesses that focus on the instruction of kids in music, sports, theater, academics, etc. 

In our recent interviews with piano teachers we've been told an increasing share of their business is teaching baby boomers and older adults.  One teacher told us her boomer business had grown from nothing a few years ago to over a third of her practice.  In addition to being a new market segment for her, most of her adult students prefer morning lessons - traditionally a slow time of day for music teachers.  Teaching older adults has expanded her addressable market and income. 

As boomers age and retire many will have both the time and resouces to pursue their hobbies.  This group will look for instruction and help, and be willing to pay for it.  We expect the personal services small business segment to continue to grow rapidly over the next decade.