Third quarter 2018 business expenses showed a decided thriftiness according to a recent study released by Certify, a leading travel and business expense tracking service provider. Their analysis consisted of reviewing more than 10 million expense reports that were submitted. Gone, apparently, are the Mad Men TV series days of two martini lunches.
Uber, Starbucks, and Amazon top the list of expense chits submitted. Even with this prominence, Uber’s 11% share and the other two’s 4% are relatively modest. Uber has negatively impacted traditional taxi services, but sees important competition from 6th place rival Lyft. Starbucks is making inroads with a more complete eating experience than just coffee service. Amazon is also catapulting on it’s known retail strength with more and more business users.
Other top ten companies expensed include travel-related carriers Delta Airlines, American Airlines, and National Car Rental. Familiar names rounding out the remainder of the leaders were Shell Oil, Walmart and McDonald’s. Hampton Inn, though not in the top ten, was the most expensed hotel chain. In food delivery, for those in-office working lunches, Grubhub continues to lead, but is threatened by fast-growing Uber Eats.
The number of international travelers rose slightly in 2017 to 76.9 million. Spending by these visitors hit a record $251.4 billion according to the U.S. Dept. of Commerce. While the number of international travelers was down slightly from 2015’s all-time high of about 78 million, the strength of visitor numbers helped allay travel industry fears about heightened federal government border and travel ban security policies.
These numbers showed a decided shift in the origin of international visitors as double digit increases in South Korea, Brazil, and Ireland offset not surprising reduced visits from Mexico and the Middle East. Mexican travelers totaled 17.8 million down from 2016’s 19 million, but still represented the U.S.’s number one source of cross-border travelers.
U.S. Travel, a travel industry trade group, noted that U.S. share of total international travel declined from 13.6% in 2015 to a forecasted 12% this year. They also are seeking an expansion of the U.S. visa waiver program beyond the current 38 countries as a means of spurring additional American visits. Under this plan, visitors need only present a passport from their host country to enter the country. South Korean visits jumped after that country was added to the list of visa-exempt nations.
Home wi-fi connectivity is fast-changing as the technology that we routinely rely and depend on evolves. To fully use and enjoy your newest smartphone, home device or those streaming media favorites found on Amazon, Netflix, Hulu or Spotify, you want to be able to receive strong, fast and reliable wireless signals throughout your home. Most of us have typically relied on wireless routers and, perhaps, a second router that acts as a range extender. It’s not unusual, though, to find frustrating weak or dead spots from room to room with such a system depending on the physical characteristics of the home. If you’re a heavy personal wireless user or rely on high-speed system availability for a home office or business, no or slow reacting response is unacceptable.
A newer and, perhaps, more robust wi-fi system is now available through a variety of technology communication companies. Popularly referred to as “mesh” systems, this linking protocol generally uses one main router and then as many satellite modules as needed to achieve the necessary coverage required for that home or dwelling’s layout and size. These added modules or nodes as they are also known, communicate both with the router and link between themselves. This mesh-type configuration assures a continuous string of “helping” communicating devices that enable signals to be as strong at the furthest point away from the wired router as the nearest. Need more or better coverage? Just add another module where coverage is not up to your expectations. Talk with your favorite tech guru. For a few hundred dollars, you can make sure your latest, greatest devices have someone or something to talk to.
While traditionalists lament the apparent decline of our domestic manufacturing capabilities in today’s global environment, a recently-released Brookings study found that our overall output standing has not changed precipitously since 1970. True, we have fallen to second behind China in total output, but, interestingly, they absorbed the most-labor intensive processes to grow their capabilities. This is evidenced by their 2015 20% global market share requiring a reported 129 million workers at a time when our U.S. 18 % share employed a much more efficient 16 million, down from 1970’s all-time highs of about 20 million jobs.
A national economic strategy should be to cherry-pick back the most attractive jobs that were likely offshored over the past several years which would also help regain the top spot in output. The Trump presidency has shown more interest in reclaiming the manufacturing sector than the prior administration that saw job growth largely occur in the governmental and service sectors.
Clearly, the U.S. has invented, grown and retained the most technically efficient manufacturing processes and industries in the world. In many ways, China is at a point where the U.S. was decades ago. Going forward, it’s important that we protect our most valuable U.S. intellectual property. Equally important is our U.S. cultivation of entrepreneurs and tech-savvy small businesses to further grow tomorrow’s manufacturing innovations . This will ensure our continued dominance on the world productivity stage, and give us added protection in a rapidly confrontational international world of nations.
As Q1 2016 comes to a close in a few weeks, is your small or mid-sized business on track to achieve or exceed your strategic goals? Are there particular metrics that don’t measure up?
Are you driving revenues as expected with decent margins? Are you gaining profitable customers? Is cost control your only salvation to date? Are any new initiatives working?
Do you have links to your subsidiary functional plans that align so that your entire business is hitting on all cylinders? Is your communication process good at getting specific expectations to those colleagues that need to perform? Does everyone have “walking around” understanding of goals and objectives? Do they “buy-in”? In our experience, many planning processes are either too “elegant”, cumbersome or non-specific. Plans can fail if they don’t lead employees to the correct behavior every day.
“Doing the right thing is more important than doing things right”.
An independent consulting check-up can help determine if your internal planning, budget and operational reviews have identified material issues and any corrective actions that may be required. It may also uncover other factors that may be missed or are considered off-limits or sacrosanct.
Now may be the time for a fresh set of eyes. All too often, owners and managers are great cheerleaders for their business (as expected) at the expense of simultaneously being vigilant and fierce critics. It’s important to identify and mitigate any competitive weaknesses before your competitors or customers do.
As fabled GE CEO Jack Welch reportedly once said “change before you have to”.
The end result of a consulting evaluation may assure your company’s ongoing high performance results. Western Equity will consider consultative, interim, temporary, or part time senior engagements. Please contact us regarding your requirements.
The SBA has declared the week of May 4th through the 8th as National Small Business Week. There is no doubt that our nation’s entrepreneurs are a vital cog in restoring and growing our country’s economy and job base. This was made all the more evident by the most recent March trade deficit numbers just released by the Census Bureau.
The $51.4 billion trade deficit in March is the highest since October 2008. Contributing to this gap is a strong dollar which makes imports cheaper and the cessation of West Coast port labor disputes which caused import backlogs.
The SBA and banks need to continue to focus on our small business community. A trend toward larger entities and the preponderance of technology and service business firms have failed to keep pace with the loss of high-paying jobs in other industry types. We need to encourage and support both local business start-ups and those that have weathered the recent economic downturn.
It remains to be seen if we can recapture and exceed our previous economic levels and leadership. If we do, we’ll owe a debt of gratitude to those that risk their personal well being by creating or maintaining their own businesses.
More entrepreneurs are needed to bolster the U.S. economy. The just released U.S. Bureau of Labor Statistics Producer Price Index (PPI) for January reflected the third consecutive monthly decline in U.S. output. Consequently, there has been virtually no change in the PPI for the 12 months ended in January. This means that the economy is still, largely, stuck in neutral despite some modest improvement and coincides with rather unimpressive employment figures related to high-paying full time job growth. Arizona, particularly, has yet to rebound from the recent recession. Business results and employment trends are largely unchanged and remain at recent year lows.
The PPI decline is reflective of plunging energy costs, softer global demand, and a strong U.S. dollar. Too, it indicates U.S. company reliance on overseas manufacturing and our net importer status as a nation. As we’ve noted here before, the ability to manufacture more domestically and not rely solely on service sector and technology leadership is a better strategy for restoring our worldwide economic dominance.
More entrepreneurs mean more small business start-ups (which also have been in decline). Without small biz leadership, the U.S. cannot realistically regain manufacturing capacity or create higher paying jobs. Big business has too many entrenched interests to be expected to make a radical directional change. Our small business centers of influence and support resources must re-double their efforts to bolster both new entrepreneurs and existing owner-operated company initiatives.
Business advertisers are reporting growing disenchantment with declining online marketing results. One heretofore standard metric of page views is proving to be a less and less reliable predictor of marketing success. At the heart of it all is the growing difficulty in getting an ad message out to the desired demographic at a time when million of websites compete for that same viewer. In a recent USA Today article, columnist Roger Yu cited the following statistics relative to web-related advertising: 55% of media site clicks get less than 15 seconds of attention; 56% of all website ads are not seen at all; 24% of viewers scroll down for ads compared to 71% seeking article content; and 1/10 of 1% of banner ads are actually clicked. In response to this disturbing trend, web publishers are focusing on longer, more compelling story content, simplified web page design that highlights key items, and creating more embeds of videos, links, quizzes, and photo galleries. Pages are also more frequently “never ending” scrolls to keep readers engaged without going to a new tab or page. Google recently opined that 56% of ads are not viewed because either readers are not scrolling far enough or the ad is are too far down on a page.
Is your business experiencing declining response results from your reported page views and click-through rates? If so, it warrants reexamining your marketing strategy with your advertising and website resources. Most small businesses are finding that while they engage in plenty of “chatter”, that activity is not so readily translating into actionable business results. And that’s what advertising is all about.
Made in the USA. That’s still the best idea! To paraphrase an old maxim: “what’s good for the U.S. is good for the world”. Let’s take a page from our post-WWII playbook and reclaim the business initiatives and entrepreneurial spirit that gave rise to our decades-long economic prosperity. Despite baseless claims by this mostly inept federal administration and their many lapdog media shills, we’re mired at a progressively stagnant, and perhaps, systemically declining economic level. More and more, many have begun to wonder if the historic U.S. business success story has peaked and if we’re on an inevitable and unavoidable downhill slide toward national economic mediocrity. Have we lost or abdicated our world-envied economic leadership to other fledgling countries or regions?
Bypassing an easy finger pointing at the many lame and ineffective politicians and agenda-driven bureaucrats, this group, as well as previous ones, aren’t largely to blame. Instead, we need to understand that the U. S. has been slammed even more so by an insidious triple-fisted mega punch of technological efficiency, on-shore manufacturing decline, and big business dominance. The fact remains that much of the so-called decline of the middle-class can be attributed to the unforeseen net loss of jobs or wage stagnation by this industrial paradigm shift. There are simply fewer $50,000 to $75,000 jobs to be had today.
The substitution or replacement of new-industry created jobs, lower full-time wages, more part-time, and contract positions simply doesn’t compute to what has been lost in this industrial transformation. The indisputable fact remains that the growth in the service sector and technical jobs has not kept pace with the loss in jobs from manufacturing, business combinations, or earning power from those displaced by other newer, less employee-dependent business models. Added to that are 25% to 50% new and higher monthly family expenses needed to run the average household given today’s market configuration from as recently as 2000. Want proof? Simply look at where we are now and where we are headed. While it is inarguable and vital that we champion our technology vision, innovation, and leadership as a nation, it’s clear now that it cannot be at the exclusion of a more comprehensive “old school” industrial skill-set. It’s time to restore the best of the “Made in the USA” model.
Entrepreneurs and small business owners need to be vigorously recruited and financially supported by our myriad financial entities, be they our currently misdirected commercial banking institutions and a largely ineffective SBA support system. Our big banks need to be led away from their harmful business model propensity to be investment bankers and real estate mortgage fee seekers. Here is a real opportunity for politicians and regulators to have a positive impact on rebuilding our national economic clout by assuring financial institutions better support job-creating businesses like those that sprung up after WWII. Banks simply have to to do more bread and butter lending like their pre-2000 counterparts.
The rise of more and larger corporations, be they regional, national, or international, and their impact on our business malaise also needs important strategic attention. Clearly, their shareholder focus largely usurps any other broader consideration. The trend away from smaller, more closely-held businesses has had a decided impact on our economic well-being inasmuch as “big biz” can more easily dictate financial terms in the marketplace. Many can only continue to survive or prosper by cost-cutting, not by revenue growth in a no-growth economy. That’s a business model that’s simply not sustainable over time. Regrettably, there’s likely some need here for governmental incentives that put U.S. economic interests first for USA-domiciled companies. It’s highly unlikely that a corporate re-migration will occur otherwise.
Lastly, at some point, our government and the macro-business community needs to realize that depending on others, particularly China, a devious business partner at best and a self-avowed U.S. foe, is a not only a shortsighted business strategy, but one that has much broader national security implications as well. Again, hearkening back to our WWII lessons, having an ever-ready, flexible, and potent manufacturing infrastructure at hand meant the difference between victory and defeat. That is no less a potential consideration in today’s rapidly deteriorating socio-political world climate.
By focusing on “Made in the USA” we can, first, restore our economic vitality over the next several years. Many of our societal pressures and conditions stem from people not being able to sustain themselves financially. A sound domestic economic underpinning can help alleviate some of those issues and enable us, once again, to be the undisputed beacon of a free world. Our diplomacy and international largess can only come from a sound domestic footing. Go USA!
Mobile advertising, whether smartphone or tablet, continues to dominate how businesses spend their marketing dollars. The first transition away from traditional TV, radio, and print advertising delivery toward more online promotions has already occurred. This second shift in ad dollar spends is to capture more clients and views by way of mobile content.
At their recent F8 developer conference, Facebook’s Mark Zuckerberg reiterated the importance of mobile to the social networking giant. He indicated that 1 billlion of their 1.28 billion users access Facebook via mobile. Mobile advertising is the single largest contributor to their revenues, he noted. As a result, Facebook is also premiering its own mobile ad network. Similarly, other social media favorites such as Twitter, Google+, and LinkedIn have their own mobile outreach strategies well underway.
The takeaway for your business is to have your web presence centered on mobile-friendly usability. Your company message and promotions need to be there as viewers move through their days at a typically frantic pace. It no longer is sufficient to have a perfect website that is viewed at a leisurely pace. You need to make things happen, right now, on that fleeting visit you get by your mobile viewers.