Health insurance continues to be the fastest increasing cost for small business owners. Even with impending new legislation, 69% of owners thought they would see premium increases from 5% to 20%. A quarter of the respondents predicted premium increases of 20% or higher.

No matter what President Obama says, 68% of the small business owners think that banks will stay missing in action for lending capital in 2012. This is a result of both the FDIC and the banks staying averse to risk. However, a quarter of the respondents did see light at the end of the tunnel and believe borrowing will increase this year.

Small business owners think that politics will dominate this election year. When asked, “Who is the best presidential candidate for small business,” owners were split between President Obama and the eventual Republican nominee. Surprisingly, 33% wished that Steve Jobs could take the job or someone else.

The most common concerns small businesses mentioned for the coming year were how the continued uncertainty in the economy and gridlock in Washington affects their own inability to make decisions. Added fears were how the euro crisis and lagging home prices will hurt the overall economy in the long run.

Editor’s note: The Shafran Moltz Group is the author’s company.

The post 2012 Small Business Outlook: Partly Cloudy appeared first on Small Business Trends.

For small business owners, large commercial banks got them into this mess and now they are preventing them from getting out. Bankers have become as respectable as used car salesmen. Large commercial banks that practiced unprofitable lending policies that were deemed “too big to fail” where bailed out by the federal government through the “Troubled Assets Relief Program.” While most of TARP’s $245 billion that it invested in banks has been repaid, the banks aren’t doing much with the profit. Absolutely, positively nothing.

Robert Eyler, professor of economics at Sonoma State University in Rohnert Park, Calif., provides a shocking insight into the current state of banking. Before the 2008 recession, he states that banks had about $2 billion in assets that they had not lent out. Today, they have $1.5 trillion on hand!

“We Are Lending!” is a popular sign in front of many banks these days. It invites the small business owners to apply for a loan even though their chances of getting one is very low. What is worse, banks tease small businesses by advertising low interest rates on loans. When I inquired at my local bank about who can qualify, the reply was, “Not many!” I now need to explain to my teenage sons that banks used to lend money, not just charge fees to keep your cash or give out coffee, cookies and trinkets on Saturdays. (When my son asked me why there was a guard at the bank, I told him that it was to make sure no one asked for a loan.)

Paradoxically, now entrepreneurs need to prove they don’t need a loan in order to get that loan. This is reminiscent of a joke that says banks will give you an umbrella when it’s not raining, but take it away when it starts to storm. Without credit, it becomes very difficult for most small business owners to expand their companies, and that is exactly what the economy needs. Large commercial banks should be ashamed of how little of their available funds has been lent out since 2009.

At the same time that banks are stockpiling cash, their fees are increasing on almost everything. Public opinion recently thwarted Bank of America from charging fees for using its debit card. However, the average bank has 49 different fees, ranging from $1.50 to $175. Among them are fees for:

• Overdraft protection
• Using an ATM machine
• Receiving or sending a wire transfer
• Making copies of statements or checks
• Replacing a debit card
• Not having enough transactions monthly
• Not depositing money in a given month
• Closing the account too quickly
• Making online transfers to other banks

This has prompted a response by small business owners to move their accounts to community banks and credit unions. In fact, November 5, 2011, was proclaimed National Bank Transfer Day, which encouraged 40,000 people to move $80 million to less-costly credit unions. In fact, the Credit Union National Association reported that from September 29 to November 5 650,000 people joined credit unions, more than in all of 2010. Not surprisingly, in the retail banking sector, more customers are choosing Wal-Mart’s financial services over those of banks.

The blame is not all on the bank executives. In an overzealous effort by the federal government to ensure that another politically-charged banking failure does not happen, the FDIC imposed very strict lending rules. It makes it much more difficult for the banks to lend money, even as political leaders publicly push those same banks to do more with the SBA. New laws require the FDIC to establish minimum leverage capital requirements and minimum risk-based capital requirements for all banks.

Banks also make payments to the FDIC’s Deposit Insurance Fund based on total domestic assets minus the tangible equity of the bank. The FDIC determines new ratios of insurance premiums to assets, where banks with higher safety ratings get lower ratios. In other words, if you lend less, you pay less. In fact, the largest banks with $50 billion in assets are also now required to show the FDIC how they would break up and sell off their assets if they were in danger of failing.

Small business owners can no longer wait for the pendulum to swing back to the lending side of the ledger. The FDIC must take action to allow and instruct banks to make loans for small business. They should establish a fund for small business from the $20 billion profit that the federal government made from TARP. This “Small Business Relief Fund” would more than double the loans that are currently available through the SBA.

If small business is indeed the key to a broad economic recovery, the FDIC, the SBA and the federal government need to pay more than lip service to it. Stable and rich banks are still a failure to the economy and to every small business owner who participates in it.

What do you think the solution is to the small business credit mess? What path should be taken?

Protest Photo via Shutterstock

The post Solving the Small Business Credit Mess appeared first on Small Business Trends.

1. Direct Selling

• Not: It used to be that every sales effort started from picking up the phone to “cold call” an industry list. This is no longer effective (partially since no one ever answers their phone!) Besides being a waste of time, the fear of rejection makes this scary to actually do.
• Hot: We are in the referral economy as John Jantsch frequently discusses. A company can automatically get put in the “maybe” pile for the a sale when a connector or past customer refers that business to another prospect. Don’t be afraid to always ask for a referral or reference. Satisfied customers almost always are happy to give them.

2. Deal-a-Day Websites

• Not: Offering coupons alone through Groupon, Living Social and other daily deal mechanism is not effective long term. This may get an immediate cash flow bump for your business, but it kills the gross margin or may even may make this particular transaction unprofitable.
• Hot: When these daily offers are used to attract new customers and then retain a lifetime value relationship, they can be worthwhile. Businesses are now turning to companies like Mob Manager that help follow up daily deal purchases with multiple emails that build a future relationship.

3. Giving Your Pitch

• Not: Trying to sell a product because it will make the future customer “better” no longer is compelling.
• Pain Killers: Every company needs a targeted “elevator pitch” that focuses on the pain the business solves for the customer that has the money. People always buy when they are in pain. JJ Ramberg gives some great guidelines on building your elevator pitch in her OPEN Forum Crash Course.

4. Generating Web Traffic

• Not: Using an outrageous YouTube video or other social media stunt that has nothing to do with your business to get website traffic that visits once and never comes again is ineffective. One and done also becomes very expensive.
• Hot: Building long-term relationships by consistently giving value through email is important. Common email marketing tools used at low cost are Vertical Response, Constant Contact and Mail Chimp. Developing your own house email list from those who are interested in your content is key.

5. Using Pay-Per-Click

• Not: Experimenting with pay-per-click by using Google Adwords, Yahoo! Search Marketing or Microsoft adCenter without really understanding how a comprehensive campaign works is a money waster. It only results in high priced ads and low conversion rates.
• Hot: Hiring a certified pay-per-click professional who actually does know how to drive qualified traffic on a budget will yield improved results.

6. It’s Still the Web

• Not: Ignoring the Internet because it is not “relevent” to a local brick and mortar business or a professional services provider is a big mistake. In 2012, if your business is not on the Web, it doesn’t exist in the minds of most consumers.
• Hot: Claiming your company’s local listings from Google, Bing and Dex Knows by verifying that all information is correct. Optimize your website for local shoppers who do research online but want to buy from a physical location.

7. More Mobile

• Not: Your company website is not visible or usable from mobile PDA and tablet devices.
• Hot: Having an “app for that” on major platforms like iPhone and Android. Prospects should be able to access information on your company through a mobile application that looks good on their phone or tablet.

8. The Social Media Hard Sell

• Not: Attempting to use Twitter, LinkedIn or Facebook or other social media for a hard sell or spamming.
• Hot: Think social CRM. Use social media to make others aware of your expertise. Helpful conversations will develop loyal bonds from people who want to hear more from you.

9. More Content

• Not: Putting up a blog every week and thinking that’s enough to spread your company’s message. If you build it, they really don’t come.
• Hot: Include the latest sharing buttons so readers can spread the content for you. The hot sharing buttons for 2012 are Twitter, Facebook, LinkedIn (for B2B businesses) and Google+, plus other selected ones specific to your industry or type of site. The ShareThis widget is an easy way to add these capabilities to any site.

What do you think is hot for 2012?

Hot or Not Photo via Shutterstock

The post Hot or Not: Sales and Marketing Trends in 2012 appeared first on Small Business Trends.

Here are 11 customer service trends to watch in 2011:

1. The time to react to your customer is shrinking. In this 24/7 instant gratification world, the time in which your customer expects you to be able to resolve their problem is getting smaller. Most customers expect to be able to reach you 24/7, and for you to resolve their concern on the very first call (or at least the same day). This is putting increasing stress on companies’ infrastructure and pressuring companies to ensure the profitability of each customer. Look for companies to begin to “fire” customers that don’t meet their profitability metric.
2. Customer service has become the new marketing. Small business owners used to be afraid that a dissatisfied customer would tell 7 people. Now, through social media sites, they can tell 7 million people. On the flip side, “raving fans” can be your biggest source of new business as they tell everyone how great your company is. Consumers believe what their peers say about your company more than they believe any of your own paid advertising.
3. You can find out exactly where your customers are talking about your company. Every business is being talked about on the Internet, but where? New customized software from companies like Flowtown allow the business owner to insert a contact’s name or e-mail address and identify the social networks in which that contact participates. Knowing where your prospects and customers congregate online is critical for engaging your customers where they are.
4. The “social support” experience grows. Consumers now talk and bond directly with each other over using your products. Companies like Get Satisfaction and Feedback 2.0 are building online communities that facilitate conversations between companies and customers. Get Satisfaction states that 46,000 companies use its product to provide a social support experience to listen and talk to their loyal customers.
5. Faster resolution of customer service issues through blog and social media site comments. Calling a company’s customer service number is no longer the fastest way for a customer to get an issue resolved. Since most brands are tracking what is being said about them on all the social media sites, tweeting your concern or posting it on Facebook will often yield quicker results. This has especially been effective for me with my vendors like Comcast, Vonage, American Airlines and Discover Card.
6. Integration of Web customer service and traditional phone support. Customized software now allows integration of what prospects and customers are saying on the Web about your company. More solutions like Parature for Facebook are available to integrate that information with your website and customer service center. Software now enables Facebook users to search their knowledgebase, submit help tickets and chat with customer service agents. Look for online and offline customer input channels to continue to merge in the coming year.
7. More self service: It started with ATMs 40 years ago and now we rarely go to the airport without using a self-service kiosk. This past year, more complicated transactions like renting a car are now being done via kiosks at companies like Hertz. Although it takes a bit longer, it is effective for impatient customers who do not want to wait in lines. Many stores have also implemented self checkout. Can buying a car or house via self serve be far behind?
8. Faux personalization becomes an expectation. With many consumer interactions now happening online or through automated kiosks instead of live people, customers have come to expect the type of “personal service” they get at websites like Amazon. Easily being able to track your current, past and recommended future purchases has become an expectation that is not easily matched in a brick and mortar store. Amazon always remembers who you are, but does your local retail store? As a result, where would you rather shop?
9. Retail stores are now an experience. Successful retail stores like Apple and Brookstone have become demo centers with a lot of service people around to help. On Black Friday, when other stores were struggling to keep up, I was in and out of an Apple store in 5 minutes with my iPad purchase. In order to compete with online shopping, successful stores are now fun places to come out and shop. Gone are the days when you couldn’t find someone to help you at Toys R Us (and I don’t miss it).
10. You need to chat. Helping a customer on your website used to providing an e-mail address or listing the company phone number. Real-time chat is now becoming a requirement in order to help your clients. Can video chat be that far behind for an even more personal touch?
11. Online inventory tracking from your customer’s phone. Your customer will no longer come into your store to see if you have a product. Companies like Milo.com can now tell the customer if a product is on your shelf. The company says it tracks real-time availability of 3 million products in 52,000 stores. Is this the end of “window shopping”?

What customer service trends are you seeing in 2011?

The post 11 Customer Service Trends to Watch in 2011 appeared first on Small Business Trends.

In fact, technology has increased our appetite to watch to entertain ourselves since we can now watch not only on television, but computers and smartphones.

There’s no reason to feel guilty about watching a movie, thinking you should be working instead.

Relax! You can actually learn about business by watching movies!

I asked a few small business leaders what were their favorite movie quotes of all time and then I thought about what I learned from that movie. Grab your popcorn and take a look at what they shared:

NO EXCUSES!

Movie:  Goodfellas. “Business is bad? F-you, pay me.  Oh, you had a fire? F-you, pay me.  Place got hit by lightning, huh?  F-you, pay me.” (From Bob London)

• Lesson: If you are part of the organization, there are no excuses for results. It is also an incentive to keep your company overhead low so you have cash to pay for what you really need.

FOCUS FIRST, GROW LATER!

Movie: Jerry Maguire: Remember the Mission Statement? “We are losing our battle with all that is personal and real about our business. Every day I can look at a list of phone calls only partially returned. Driving home, I think of what was not accomplished, instead of what was accomplished.”

• Lesson: Fewer clients, more personal attention makes for a better business. Growth for growth’s sake is a bad business strategy.

STAND UP FOR YOUR BUSINESS!

Movie: Road House: “Be nice.  Be nice until it is time to not be nice.”  (From Prasann Thakrar)

• Lesson: Being nice in business does not always get the results you want. Many times, we need to press our point.

RISE TO THE OCCASION

Movie: Mr. Magorium’s Wonder Emporium: “Your life is an occasion. Rise to it.” (From by Phillip Zannini – @PhillyMac)

• Lesson: We need to remember that we are responsible for our own success. Never look for that one magic bullet in business or for someone to save you because no one is coming. The magic comes from the hard work you give to your business.

EVERYONE NEEDS TO BE ABLE TO SELL

Movie: Glengarry Glen Ross “Good leads are for closers“.  (From Vicki Donlan)

• Lesson: You need to know what to do with a lead if you are going to close a sale. There is no substitution for being able to sell. We all need to learn and have skilled sales people on our team.

GET TOUGH — DON’T COMPLAIN!

Movie: A League of Their Own: “There is no crying in Baseball“.  (From Scratch at Boston Baby Dolls).

• Lesson: No matter how bad it gets, long term, crying does not help us in business.

From the same movie “Of course this is ‘hard’:

• Lesson: People always tell me that their business is especially hard. Guess what, every business is hard.

RELATIONSHIPS ARE POWERFUL

Movie: Hustle & Flow – You’re in charge of your business and the power of marketing relationships.  (From Elizabeth W. Wilson)

• Lesson: No matter where you come from, you can become successful.

DON’T LET ANYONE TELL YOU WHAT YOU CAN’T DO

Movie: Legally Blonde: Elle uses what she has to achieve her goals. (Submitted by Phillip Zannini)

• Lesson: We all need to make it work from where we are right now

LEAD BY EXAMPLE

Movie: It’s a Wonderful Life:  The movie shows the principles of leadership. George Bailey puts his customers, employee and family interests first by taking responsibility.  (From Stephen Antisdel of Precept Partners)

• Lesson: If more financial institutions has operated this way maybe the “Great Recession” would have been avoided.

LOVE YOUR LIFE

My favorite movie quotes are from the movie, Jerry Maguire, as said by Jerry’s mentor, Dickie Fox:

“Hey, I don’t have all the answers. In life, to be honest, I failed as much as I have succeeded. But I love my wife. I love my life. And I wish you my kind of success.”

Want more? Check out Kevin Coupe and Michael Sansolo, the co-author of The Big Picture: Essential Business Lessons from the Movies interview on my radio show.

What are your favorite quotes or business lessons from movies?  Share them below.

The post Small Business Lessons We Can Learn from Watching Movies appeared first on Small Business Trends.

What to watch in 2010:

1. We Try Harder: With the economy still struggling to recover and unemployment at record highs, all “customer facing employees” actually will try harder this year to attract, satisfy and keep their customers.  Job prospects remain slim in 2010 and every employee wants to keep any job they have. This year, effort from everyone will be in plain sight.
2. It’s Not Your Product: Zappos‘ tag line is “Powered by Customer Service“. With the company being sold to Amazon for almost a billion dollars, there is no denying that customer service can build companies. Zappos proved that it can make money selling shoes over the internet by offering free shipping both ways. Amazon and Zappos are companies that really just don’t sell products, but a customer service channel to sell any product. All things being equal, I buy from Zappos and Amazon because I know I can count on them. This is the year that all companies will see service as the only way to keep customers buying from them.
3. It’s All About You. Technology has allowed companies to personalize my visit when I go to buy from their web site. When I visit Amazon’s site, they welcome me back by name and suggest things I might want to buy based on what I bought in the past. This is the type of personalization I come to expect when I go to any face to face retail establishment. When I check into a hotel, I want them to greet me by name if I have been there before or I am a member of their frequent buyer program. This always happens when I visit the Portland Paramount but at The Nines hotel in the same city, they never remember who I am.  With the immediacy and personalization of this fast paced internet world, great customer service is only what the customer says it is at a particular point in time. The difficulty is raised because this standard varies from person to person. This year, more companies will customize your shopping or service experience either online or in person because that is what you want.
4. Tell the World. Tools like Facebook, Twitter, and YouTube allow me to tell not seven people but 10,000 my pleasure or dissatisfaction with a company immediately after I interact with them. No more secrets here! Every satisfied customer is now a booster for your company and every dissatisfied customer potentially can hurt your business. Now, there is more of an incentive for every company to get it right for their customer. This year, no bad deed will go unpublished by a dissatisfied customer.
5. The Brands are Listening. You as the customer are talking on Facebook and Twitter, but companies are also beginning to listen. Chances are that if you post a complaint using one of these tools, the company will respond directly to you. I have had this happen with Sears and Lands End. This year, all the major companies will not let any negative comment go by without responding to your concern.
6. Online Service Gets a Face Lift. Forget the lag time of email or waiting for a call back. This year, more and more web sites will allow you to chat directly to customer service people either through chat or video. Want to chat from your phone directly to the company? No problem. Skype them? No problem.  Scott Jordan at Scottevest, allows the customer to watch what is going on in his company live on the web every day!
7. Insourcing is In. More and more American companies who outsourced their customer service will bring that function back home either by hiring a domestic company or bringing it in house. The “we can outsource this customer service thing” has hurt companies like Dell and Capital One. This year, look for more of the technology assisted customer service jobs to be transferred back to the US. Companies realize how important it is to their business. Just ask any car dealer the profitability of new car sales to their car maintenance business.
8. That’s Tight. Companies you do business with will want to know everything about you. Tighter relationship with customers will continue as economy remains poor. Companies can’t afford to lose profitable current customers. This goes way beyond frequent flyer programs. Accenture working with Proctor and Gamble has a new technology that tries to predict consumer preferences using optimization engines. This year, companies will continue to track everything about you to make that your relationship as personal as it gets.
9. Fire Them. In 2007, Sprint famously fired 1,000 customers that were clogging up their customer service lines and costing the company loads of money. Not every customer you have is profitable. Look for more companies this year to fire you if you cost them money and recommend you take your business elsewhere.
10. Get Small. All startups used to want to appear big. We bought typewriters and later computers and web sites to make ourselves look the part. Now, everyone company, as Chris Brogan says, wants to be human. I call it getting small. Every company wants to seem like the corner store, but have the global pricing power and distribution of Walmart. Furthermore, big business is now consistently targeting your small business since it is the a sector of the economy that is growing. President Obama will continue to emphasis that small business is the core of American business. You have arrived!

What do you see as the trends in customer service for 2010?

* * * * *

About the Author: Barry Moltz has founded and run small businesses with a great deal of success and failure for more than 15 years. He is the author of three small business books, the latest is “BAM! Delivering Customer Service in a Self-Service World.” Barry is a nationally recognized expert on entrepreneurship who has given hundreds of presentations to audiences ranging from 20 to 20,000.

The post The 10 Customer Service Trends for 2010 appeared first on Small Business Trends.

The actual title is You Need to Be A Little Crazy: The Truth about Starting and Growing Your Business.

The book describes the crazy ups and downs and emotional trials of running a business.

Barry is a very funny and smart entrepreneur and writer. As his bio says, “Barry J. Moltz has been running small businesses with a great deal of success and failure for 15 years.” He’s even been dubbed the Bill Cosby of entrepreneurship, because of his humor. Of course, I like the description on his business card best of all: “passion, courage and a streak of craziness.”

So, with that introduction, we are very fortunate to have Barry provide his trend insights today here at Small Business Trends.

We asked Barry to give us some pithy takes on key trends he sees among entrepreneurs and small businesses in the new millennium. Here are the trends Barry Moltz identified:

• Our 1990′s hangover is almost over

We are finally back to realizing it is better to get customers than money if you are an entrepreneur serious about building a business. We realize we won’t get money for our business by writing our ideas on the back of a napkin. We need to dig into our bank accounts and invest our own money first to get real paying customers that are not our relatives. Thick business plans and excellent products don’t always mean a financially successful business. Think marketing. Think sales and distribution. Just because you build it, does not mean people will come! If you solve a real problem, people will pay you for it. But beware, consumer paradigm shifts take forever.

• We are downsizing our dreams

More of us are lowering the personal financial expectations of our businesses. We realize that we do not need to build and run publicly traded companies. Few of us should be Michael Dell or Bill Gates and that is fine with them. We know there is nothing wrong with choosing a lifestyle business that generates several million dollars in sales. We have stopped trying to keep up with the Joneses or whoever it is we are meeting on the chat boards these days. We just want to build something we are proud of. The key question we face is “Can we merge our personal and business goals into one fulfilling life?”Strike a chord with you?

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Thanks to Barry Moltz for sharing his trend insights today. He can be found at www.barrymoltz.com. We’ve also added his blog, Barry’s Blog, to our blogroll.

The post You Must be Crazy! appeared first on Small Business Trends.