Archive for October, 2008

Location Decision-Making Just Got Easier

Friday, October 31st, 2008

By Dean Whittaker

The purpose of information is to help us make better decisions. Making a good business-location decision is essential to success. To do so requires high quality, accurate, up-to-date information and an understanding of what it means.

In the past, many small firms making site-selection decisions did not have the resources to undertake this all-important, make-or-break decision in a methodical, thoughtful way. They were forced to make this decision with limited information. We have all felt the consequences of poor decisions based on incomplete, inaccurate or misleading information.

A new Web 2.0 tool, www.ZoomProspector.com, attempts to address this need.   This geographic information system-based application (called GIS) enables the user to select demographic and building/site parameters, weight them by importance, and then search among US cities or counties to find the location that best fits the parameters.  The system is a fast and easy one-stop place to gather data to narrow the site-search process to a handful of suitable locations.

The application includes a searchable database of site location consultants and economic development organizations to help the user engage qualified experts to take the next step in the site-selection process.   For new locations, relocation, expansion or consolidation, this Web 2.0 application provides the information necessary to make a smart, well-informed decision.   Through a ZoomProspector partnership with Whittaker Associates, Inc. (a firm specializing in predicting corporate behavior), companies predicted to seek a new location will be offered the use of the Web tool at no charge.

ZoomProspector is all about connections. It connects communities interested in improving their local economies with companies seeking a location.  ZoomProspector also connects owners of available property (or their agents) with businesses considering relocation.  A prompt transaction and maximized property value is achieved by closely matching a self-selected audience of potential users to the property.

ZoomProspector connects companies to the expertise of site-location consultants and economic development organizations.  In the past, finding talented professionals to assist in a complex site-location decision has been hit or miss. With this new tool, finding the person with the industry and community knowledge has just gotten easier.

The significant increase in energy cost is forcing many companies (particularly those with high-energy inputs, such as food processing) to re-consider their current location in order to optimize their proximity to raw materials, talent, and customers.  Competing in logistics has emerged as an effect business strategy. To maintain their globally competitive advantage, companies must continuously re-evaluate their location as conditions change.  ZoomProspector gives them the tools to do so.

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Selling Your Way Out of a Slow Economy

Friday, October 31st, 2008

By Todd Smithee

As a refugee of three tech start-up companies, I had the “opportunity” to learn about running a company where expenses exceeded revenues.  Several of these previous employers went bankrupt or had their assets sold for much less than the original investment.  In all three cases we spent millions of dollars to hire quality people, develop great products and services, and create an all-encompassing killer marketing plan.  All of the millions in investment went for naught.  We eventually had to cut jobs and costs to stay afloat.  No matter what we did we had to face the fact that our sales plan did not reach expectations.  While the lessons were learned were in a growing economy, the practical applications remain valid.  You can extend the misery by cutting costs, but to survive long-term, you need to have a successful sales plan.

While these concepts are simple in nature, execution and management over an extended period of time can be difficult.  The following checklist will give you a place to start:

  • Expectations of Sales Personnel – This sounds simple enough, right?  It would be wise to confirm this with your staff.  I have frequently found that a major disconnect exists between sales teams and management with regards to expectations.  Be sure that everyone understands what is expected of them and hold them accountable.
  • Driving New Business – Most sales people absolutely hate prospecting.  The grind and rejection of prospecting definitely is not on the top of anyone’s list of enjoyable things.  That said, prospecting for new clients is critical in a slow economy.  Take the time to work with your sales team to identify specific companies to target for the upcoming year.  Provide clear guidance on expectations and follow up with your team monthly to ensure activity levels are appropriate.
  • Use the Internet – search engine optimization and paid Internet advertising is a very cost-effective way to immediately generate sales leads.  What’s more, you can target specific geographic areas that match up with your business strategy.  You will want to be sure to consider potential customers in other parts of the country even if you do not currently have a sales representative in those areas.  Some regions of the US are still doing quite well economically.  You can identify prospects in those regions via the Internet and make your presentation from your home office using a web-conferencing tool.
  • Look for “Rain Brokers” – An attorney once told me that while a rain maker is great, it is better to have rain brokers.  These are people who have significant contact with those prospects to whom you want to sell.  Look for ways your rain brokers can solve their problems by referring you to their customers and contacts.  These solutions can be as simple as providing information to their customers as a service to helping them solve a specific issue.

These steps will help you generate additional business with limited additional investment.  They will not work, however, unless you regularly measure their effectiveness.  Things that get measured tend to happen.  Things that do not get measured are almost always forgotten.

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Recession-Resistant Industries

Friday, October 31st, 2008

By Jami Miedema

Can you believe that thirty-two percent of businesses plan to hire full-time employees yet this year, according to a survey conducted by CareerBuilder.com? Despite the sluggish economy, many industries are prosperous and may even face shortages of workers to fill positions in these fields. Those who need employment can try reviving their talents in a fresh industry.

One of the “recession-resistant” industries is Education. Especially in the South, skilled teachers are needed as school enrollments increase. This shows promise not only for education majors, but for administrators, counselors, and other professionals. A salesperson in retail may face a slowdown as consumers’ discretionary incomes are reduced, but his same skills could be used to begin a lucrative career in textbook supply.

Other healthy industries are Energy and Environmental. Power generation has been, and will continue to be, a big issue for our nation. People with knowledge about oil, gas, and renewable energy will see many employment opportunities. Also, workers with “green skills” will be in demand as global warming and sustainability continue to be heavily debated topics of concern.

Another booming industry is Health Care. Occupations in the medical field, such as physicians’ assistants, therapists, and aides, cannot be filled fast enough. This lack of healthcare workers will become an even bigger void to fill as baby boomers age and need medical attention. Health service operations also need information technicians and other business-related workers to keep companies running smoothly behind the scenes.

Finally, Security is an industry experiencing an upswing. Whether it’s at our country’s borders, our local police station, or online, security is always needed. In today’s society where threats and identity theft are becoming increasingly common, guardians are needed to protect and preserve institutions as well as information.

These five industries offer some promising opportunities that don’t require workers to switch career paths, but rather transition their abilities into new sectors thriving in today’s challenging economy. Check around—are there specific organizations in your area in great need of new talent?  Can your economic development team connect unemployed workers from other sectors to jobs in recession-resistant industries? Can you get local community colleges on board to supply the retraining transitional workers might need?

Source:
All information from John Challenger, CEO of Challenger, Gray and Christmas, an outplacement firm, from Zupek, R. (Sept 4, 2008), “Is your job recession-proof?” http://careerbuilder.com.
Buhl, L. (2008), “Recession-proof jobs in 2008.” http://hotjobs.yahoo.com.

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Marketing Notes…

Friday, October 31st, 2008

By Jim Bruckbauer

For most communities, your best prospects are different than they were 2 years ago, and most companies are thinking differently than they were 2 years ago.  So if you’re implementing your marketing strategies the same way you were 2 years ago, you should think again.  You need to quickly adapt to the changing economic environment.

We are experiencing a time of tight budgets, overworked staff, and information overload. This not only applies to us as ED professionals, but also our prospects.  This will change–maybe sooner or maybe later–but for the time being, how are you changing your marketing efforts to meet your goals during this time?  Cost-effective marketing is a must for 2009. Here are a couple of ideas that have been discussed around the office lately:

Be noticeable.

It is becoming increasingly tough to get the attention of the decision-makers of companies. This is usually due the mass quantities of solicitation attempts throughout the day in any given corporate environment.  Our partners and clients who have proven to be most successful at reaching decision-makers have gone to some lengths to infiltrate the administrative shield.

Many marketing experts will advise you that building a relationship with the gatekeeper is truly a necessary step in reaching your target. This can be done a number of ways.  Routinely sending informational 2-dimensional materials such as brochures and letters followed up by a phone call is a traditional way that has worked.  This is especially effective when mixed with a charming tone or when a great amount of graphic design is incorporated into the materials.

A more effective way to differentiate your materials from the rest of the information in front of the gatekeeper is to send a 3-dimensional item that may trigger an emotion. This creates a memory in the brain that can be a point of reference for a future follow-up.  An idea we had for one of our clients with a strong Irish heritage was to have them send a live Shamrock to companies that are suspected of having relocation or expansion needs.  Building on their branding theme, a Shamrock is directly related to the region and gives the emotional feeling of “growing.” A Shamrock is an item that will most likely not be discarded with other marketing materials. It will most likely be placed on a desk and enjoyed. The call that you make to this company is no longer cold, as you have now established a reference point.

You could even go the extra mile by sending a watering can, followed-up by a planter, followed-up by a soil and seed mixture. This adds an element of humor and eager anticipation for the next item that will definitely be memorable. The more memorable you are, the more effective your marketing can be. The outcome of this investment is well worth the minor cost incurred.

Other cost-effective things to think about:

  • How much will you PAY a potential prospect to visit your town or have a 1-hour meeting with you?  How about a $100 donation to a designated charity of the prospect’s choice?
  • Attract more visitors to your website by setting up a Scavenger Hunt, where the participants are asked questions about your community.  Establish a prize, such as an iPod, for the winner.
  • Hire a seasonal intern from a local university to develop a complete Web 2.0 marketing campaign.  Social media outlets like YouTube and Facebook are literally free ways to market not only to current executives, but up-and-coming future executives.  (Very proactive communities are targeting Millennials and younger on Facebook.)
  • Are you promoting your local banks, which were not as affected by the mortgage crisis and still have lending power?  Companies are looking for this.
  • Your best prospects may have changed without you knowing.  We’re very interested in discussing marketing ideas.  We’re also very interested in assisting our clients in discovering which industries are shifting in this economic time.  If you’d like to join the conversation, call us.

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How the Global Economic Crisis is Playing Out in Emerging Markets

Friday, October 31st, 2008

By Vidhan Rana

The financial crisis of 2008 is the world’s first true economic crisis. Never before have the world’s economies been so intertwined, nor have the all world’s citizens felt economic fear on such a scale. Even after the United States’ $700-billion economic-rescue package has passed, along with a volley of other financial packages from governments in Europe and Asia, the future of the world economy remains uncertain.

Over the last decade or so, the world’s economic growth was led by emerging economies such as China, India and Brazil. Now that global demand is declining as a result of the financial crisis, these emerging economies are having a hard time selling their products on world markets. On October 20th, China’s National Bureau of Statistics announced that its growth slowed to a rate of 9% year-on-year in the third quarter of 2008. A heady number by Western standards, the 9% growth rate is the lowest for China since 2003. This month, two big Chinese companies, Smart Union Group, a toymaker, and FerroChina, a steel producer, went into bankruptcy. Singapore-listed FerroChina could not garner enough cash to repay its working capital loans. Analysts in Asia maintained an outperform rating on the company’s stock just a week before its collapse. Analysts are now frantically checking the books of other publicly-listed Chinese companies for warning signs.

China’s fast economic growth caused major shortages of labor, mainly in the industrial southeastern part of the country. Now, for the first time in years, there are actually labor surpluses as manufacturing plants lay off workers by the hundreds. Both falling demands for its exports and the tight credit market are to be blamed. Americans and Europeans are not buying Chinese exports as voraciously as they were in the early parts of this decade.

India is facing its own problems. Last week state-owned Air India announced a plan to give 3-5 years leave without pay to about 15,000 of its staff. The country’s leading private carrier, Jet Airways, laid off 1,900 employees in a similar move earlier this month. After growing at a record pace of 9.3% in 2007, the country’s economic growth rate is expected to slow down to 7.9% in 2008 and further down to 6.9% for 2009, according to International Monetary Fund projections. The banking sector, however, appears stable. None of the banks have gone bust so far. Kamal Nath, India’s commerce minister, pointed to the country’s stricter financial norms for the relative stability in its financial markets.

India’s strongest export sector, the information technology industry, has fared relatively well in these difficult times. The Indian Rupee’s falling exchange rate versus the US dollar has kept the sector’s pricing lower in the US and European markets. Som Mittal, the president of National Association of Software and Services Companies (Nasscom), reported that though the growth of IT companies has slowed, many are still expected to hire more employees in the coming quarter. The industry is now looking to new markets like Japan, where the ageing population is causing an acute labor shortage.

Brazil seems to be faring best among these three emerging economies. Since 1995, all of Brazil’s banks have complied with an 11% capital requirement, whereas the US capital requirement, based on the Federal Deposit Insurance Act, is just 4%. Brazil has also benefited from historically high commodity prices during the last four years. Nearly half of the country’s exports are commodities. Though commodity prices are finally declining from their historical highs, the effect is yet to be felt in Brazil.

One of Brazil’s most successful corporations, Embraer, is the world’s largest manufacturer of commercial jets in the world. So far the company has not announced any major layoffs. Its backlogged order book has ensured that the company’s business will remain strong well into 2009. However, an executive at the firm recently said that the company is concerned about the developments in the financial world. With over $200 billion in reserves and a diversified foreign trade (15% with the United States and 20% with the European Union), the country’s leaders seem confident that they can pass through this financial turmoil with just minor bruises.

Today, the developing world seems more confident about its economic future than the developed world. China, India and Brazil’s economies are definitely slowing down, but they are certainly not going into recession. In some sense, a slowdown may just help China, as it was already worried that its economy could overheat due to uncontrolled economic growth. The slowdown is also bringing world food prices down, which may bring relief to millions of people living at the edge of poverty.

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The Joy of Serendipity

Friday, October 31st, 2008

By Dean Whittaker

While sailing this summer, we unexpectedly encountered an enormous storm.  The speed at which the storm was moving was stunning. Usually, one can see a storm forming and make plans to be in a safe port to wait it out; however, this time that was not an option. The storm formed right in front of us. Checking the radar to look for an opening in the front proved to no avail. The entire radar screen was black, indicating no weak areas to head towards. I watched as my sailing buddy uncharacteristically turned into the wind and dropped his sails. Knowing this to be unusual, I followed suit by turning into the wind, dropping our sails, and starting the engine.

I radioed over to my more experienced sailing buddy and asked for recommendations to prepare for what might lay ahead. His response was less than re-assuring. He said “secure your hatches, make sure there is no loose equipment that could become a projectile, and put on your foul-weather gear. Within a minute or so after heeding his advice, we were hit by 40-50 knot winds and 4-6 ft. seas.  Perhaps, the most frightening aspect of all was the speed at which the storm was coming toward us.

The forethought that had gone into the design of Serendipity came to mind as the boat easily handled the storm. The fact that someone had considered that there would come a day when this boat would be in heavy weather and that it should be designed for that occurrence was a relief. During the most intense moments of the storm, I kept reassuring myself “this can’t last forever…this can’t last forever.” And low and behold, it didn’t.  After a disconcerting two and a half hours, the storm passed over us and there was blue sky and calm water with just enough wind to resume sailing. Again, I was reminded of the recurring nature of things and not to think in a linear fashion in a cyclical world.

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