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5 Most Dangerous Trends Facing Small Business in 2014
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5 Most Dangerous Trends Facing Small Business in 2014

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Economic Uncertainty. One of the main factors indicating that the U.S. may not experience strong economic growth in 2014 is its weak GDP growth. ...

Economic Uncertainty. One of the main factors indicating that the U.S. may not experience strong economic growth in 2014 is its weak GDP growth.
According to Federal Reserve research, since 1947, when real GDP grows at a rate of less than two percent year-over-year, recession has occurred in the following year about 70 percent of the time.

In the first and second quarters of 2013, GDP in the U.S. grew by 1.1 percent and 2.5 percent respectively. Barclays forecasted that third-quarter GDP growth will be 1.5 percent, but it can be significantly lower because of the government shutdown.
The government shutdown can have a very real impact on the economy, putting its recovery in jeopardy.

Businesses are facing more policy uncertainty now than any other time since the debt-ceiling fiasco in 2011. The current monetary and fiscal uncertainty can result in a significant decline in investment and employment, and potentially lower economic growth rate by as much as one percent this year.

If that happens, the economy may be at stall speed by the beginning of 2014. According to some experts, there is a possibility that the U.S. will experience a recession next year.

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5 Most Dangerous Trends Facing Small Business in 2014 5 Most Dangerous Trends Facing Small Business in 2014 Presentation Transcript

  • 5 MOST DANGEROUS TRENDS FACING SMALL BUSINESS IN 2014
  • A SNAPSHOT OF THE CURRENT BUSINESS CLIMATE Our overall economic outlook for 2014 is for moderate growth with U.S. GDP increasing only 2.5% to 2.75%. Expect a challenging hiring and job market to continue with unemployment falling and finishing the year in the 6.5% to 6.7% range. However, the workforce participation rate is at a 30 year low. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 2
  • A SNAPSHOT OF THE CURRENT BUSINESS CLIMATE A business closes or files for bankruptcy every 53 seconds A company changes control every 15 minutes 630-800-7545 Hawkeye Consulting Advisors, Ltd. 3
  • A SNAPSHOT OF THE CURRENT BUSINESS CLIMATE 26,000 new products and brands are introduced every year 16%-30% of all consumers change brand loyalty in one evening of watching commercials 74% of consumers buy outside their “favorite” brand 630-800-7545 Hawkeye Consulting Advisors, Ltd. 4
  • A SNAPSHOT OF THE CURRENT BUSINESS CLIMATE The average consumer is bombarded with more than 4,000 commercial messages per day. And that number is even HIGHER for business owners. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 5
  • A SNAPSHOT OF THE CURRENT BUSINESS CLIMATE Attention has become a scarce resource in the information economy. The advertising and information clutter only worsens when it comes to your email In-box, with countless hours wasted with spam. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 6
  • DANGEROUS TREND #1 E m p l oye e Health Care Costs 630-800-7545 Hawkeye Consulting Advisors, Ltd. 7
  • EMPLOYEE HEALTH CARE COSTS  There’s bad news for those tired of the Af fordable Care Act (Obamacare) - the controversial legislation will continue to be in the spotlight throughout 2014.  Small business owners will need to move beyond the hype (and their own political views) and focus on securing the most cost ef fective health care plans for themselves and their employees. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 8
  • EMPLOYEE HEALTH CARE COSTS  A recent Rasmussen Reports national telephone survey finds that Americans Are More Pessimistic About 2014 and About Their Health.  At the end of the year that Obamacare made its official debut, most voters still believe the law will drive up health care costs, increase the deficit and hurt the quality of health care in this country. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 9
  • EMPLOYEE HEALTH CARE COSTS Under the ACA, Employers with fewer than 50 workers don't have to offer health insurance, while those over 50 will either have to offer coverage or pay fines in 2015, when the ACA's "employer mandate" kicks in. Most U.S. citizens and permanent residents are required to either have health coverage or pay a fine, which in 2014 is either $95 or 1 percent of their income, whichever is higher. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 10
  • EMPLOYEE HEALTH CARE COSTS Plan to keep current insurance and think reforms are good 13% 30% 7% 6% Plan to keep current insurance but think reforms are a bad idea Plan to enroll in new HC plan and think reforms are good idea 44% Plan to enroll in new HC plan but think reforms are bad idea • We’ve learned that over 4.7 million insured have ‘lost’ their old plan during Q4 2013. • Over 50% didn’t like the change even before they lost their plan. • Now they’re angry or worried or both. Don't know 630-800-7545 Hawkeye Consulting Advisors, Ltd. 11
  • EMPLOYEE HEALTH CARE COSTS What to do NOW?  Know your obligations as a business owner. How does the ACA Health Care law affect your financial position and your employees?  Evaluate which jobs require a 40 hour work week. If not, can the job be done effectively at less than 30 hours per week?  Anticipate your most valued employees demanding higher wages to compensate for their higher health care costs. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 12
  • DANGEROUS TREND #2 The Widening Small Business Digital Divide 630-800-7545 Hawkeye Consulting Advisors, Ltd. 13
  • THE WIDENING SMALL BUSINESS DIGITAL DIVIDE Research is showing a performance gap between small businesses that successfully use technology and those that don’t. This small business digital divide means small firms unable or unwilling to deploy and use technology – and especially cloud, analytics and mobile technologies – are increasingly disadvantaged relative to their more technically savvy competitors. 2014 will see this divide widen as tech savvy small businesses use their technology to cut costs and better connect to customers. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 14
  • THE WIDENING SMALL BUSINESS DIGITAL DIVIDE Mobile, Cloud and Analytics technology trends has been on CNN’s annual top 10 lists in some form for years. And while each is important and powerful on its own, the growing convergence of these technologies is amplifying their impact and fundamentally changing how business is done. They’re also leading to new forms of technology-based competition as more small firms use capabilities developed through the convergence of these technologies to out maneuver competitors. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 15
  • THE WIDENING SMALL BUSINESS DIGITAL DIVIDE Most Small Businesses are racing to play catch-up with companies that are prospering with Web applications that establish interaction, dialogue and deep connections with their Customers, Prospects, Employees and Partners. The Internet has shifted the balance of power to the customer, and companies that fail to empower customers – risk losing them to competitors who are only a short click away. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 16
  • THE WIDENING SMALL BUSINESS DIGITAL DIVIDE  It now costs 3X more than it did in 1992 to reach your prospective buyers.  In 1992, it took an average of 4 attempts to reach your buyer. Today it takes 9+ attempts.  Therefore you get one half the results from the previous same efforts. 630-800-7545 10 9 9 8 7 6 5 4 Attempts Costs 4 3 3 2 1 1 0 1992 Hawkeye Consulting Advisors, Ltd. Today 17
  • THE WIDENING SMALL BUSINESS DIGITAL DIVIDE What to do NOW?  Consistently communicate through your network, what makes you unique and how it benefits them.  Select a narrow ideal target market and market continually.  Market through your partner relationships to benefit their network. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 18
  • DANGEROUS TREND #3 Wages Going Up across USA 630-800-7545 Hawkeye Consulting Advisors, Ltd. 19
  • WAGES GOING UP ACROSS USA Starting January 1, 2014 minimum wage workers in 13 states and four cities will see higher paychecks. While most of the increases amount to less than 15 cents per hour, workers in places like New Jersey, Connecticut, New York and Rhode Island will see a bigger bump. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 20
  • WAGES GOING UP ACROSS USA During 2013, New Jersey residents voted to raise the state's minimum wage by $1 to $8.25 per hour. Lawmakers voted to hike the wage by between 25 cents and 75 cents per hour, to $8.70 in Connecticut and $8 in Rhode Island and New York. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 21
  • WAGES GOING UP ACROSS USA Residents in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington will see a higher wage floor due to annual cost of living adjustments. The Economic Policy Institute, a left-leaning think tank, used Census data to estimate that the increases will boost the incomes of 2.5 million low-wage American workers next year. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 22
  • WAGES GOING UP ACROSS USA What to do NOW?  Evaluate worker effectiveness.  What productivity measures are in place?  How are these measures communicated?  Hire the right workers who can and will do the job right. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 23
  • DANGEROUS TREND #4 Increased Competition & Business Failures 630-800-7545 Hawkeye Consulting Advisors, Ltd. 24
  • INCREASED COMPETITION & BUSINESS FAILURES Did You Know…? There are over 60,000 new businesses started EVERY YEAR? – SBA Training Network 96% of ALL businesses Fail within the first 10 years… 80% of those Fail within the first 2 years. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 25
  • INCREASED COMPETITION & BUSINESS FAILURES  We were in the midst of the largest entrepreneurial surge this countr y has ever seen . FORTUNE: March 2007  Nearly 672,000 new companies with employees were created in 2005. That was the biggest business bir thrate in U.S. histor y!  30,000 more star tups than in 2004, and 1 2% more than at the height of dot -com hysteria in 1996.  More than 200,000 small businesses vanished between early 2008 and today. 630-800-7545 Today 2010 2007 2005 2004 1996 Start Ups Hawkeye Consulting Advisors, Ltd. 26
  • INCREASED COMPETITION & BUSINESS FAILURES  Wells Fargo/NFIB study: Over the lifetime of a business: only 39% are profitable 30% break even 30% lose money with 1% falling in the ‘unable to determine’ category.  Reasons Include:  Lack of sufficient capital funding  Poor management skills  Lack of sales 630-800-7545 Net Income 1% 30% 39% Profitable Break Even Lose Money Don't Know 30% Hawkeye Consulting Advisors, Ltd. 27
  • INCREASED COMPETITION & BUSINESS FAILURES What to do NOW?  Spend an hour per day with your team working on your business (not just in it).  Build a sound and tested process for the way you sell to your prospects and add value to your clients.  Create a workable plan for strategically marketing your business. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 28
  • DANGEROUS TREND #5 Lack of Cash Flow 630-800-7545 Hawkeye Consulting Advisors, Ltd. 29
  • LACK OF CASH FLOW Cash flow is the lifeblood of your business. Without it, your business will wither and die regardless of how many sales you've made or how much money is owed to you. As soon as cash flow fails to produce the surplus funds you need, challenges arise and overwhelming stress can quickly follow. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 30
  • LACK OF CASH FLOW Your primary responsibility as a business owner is to ensure the flow is consistent with more money coming in than going out so a pool starts to form to hold the overflow. This overflow is what allows you to make early payments so you can benefit from vendor discounts, to take advantage of special deals, capitalize on newfound opportunities and easily cover unexpected emergencies. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 31
  • LACK OF CASH FLOW  The #1 reason businesses fail is a lack of money.  Accounts Payables and Accounts Receivables are at record highs.  The average collection time for Accounts Receivables have increased by 40%. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 32
  • LACK OF CASH FLOW  Small businesses are highly dependent on their cash flows so they must either cut costs or scramble to find alternative funding if they are not being paid on time.  With money tight and bank loans hard to get a cash-strapped company can easily be pushed to the brink. – Wall Street Journal 630-800-7545 Hawkeye Consulting Advisors, Ltd. 33
  • LACK OF CASH FLOW How much money do you have outstanding? Collection Agency Lawyer Yourself 630-800-7545 Hawkeye Consulting Advisors, Ltd. 34
  • LACK OF CASH FLOW  Collection agencies charge between 30% and 50% of the collected amount.  Lawyers charge $100 to $500 per hour. Even if you get a judgment, you still need to collect.  It only takes a few minutes of your time if you have a plan. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 35
  • LACK OF CASH FLOW What to do NOW?  Invoice correctly at the right price and in a timely manner.  Protect yourself with the proper language on your invoices.  Build a sound and tested process for the way you collect on current and past due invoices. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 36
  • ONE LAST IMPORTANT NOTE 630-800-7545 Hawkeye Consulting Advisors, Ltd. 37
  • THE NEXT STEP FOR THE ASTUTE BUSINESS OWNER:  Have a customized Business Assessment done to determine the key leverage areas.  Have your Lowest Cost / Greatest Reward Improvement Strategies identified. 630-800-7545 Hawkeye Consulting Advisors, Ltd. 38
  • T H E I N FORMATI ON C ON TAI NED I N T H I S E X E C UTI VE BRI E F ING I S BROUG H T TO YOU BY Hawkeye Consulting Advisors.com Get your own copy of this executive briefing Empire Research / Growth Strategies 630-800-7545 Hawkeye Consulting Advisors, Ltd. 39