» Posts tagged ‘Economy’

The North Bay Business Journal, a publication of the New York Times, is a weekly business newspaper which covers the North Bay area of San Francisco – from the Golden Gate bridge north, including the Wine Country of Sonoma and Napa counties.

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Article published – November 2, 2009

Building a Business: Can small companies lead in “consumer-directed” health care?

Disconnect between consumers, providers needs to be solved

“The only way to keep your health is to eat what you don’t want, drink what you don’t like and do what you’d rather not.” - Mark Twain

Health care reform has become a cause célèbre with potential costs that will threaten many small businesses. That’s one of the reasons I’m attracted to the growing use of “consumer-directed” plans that require each of us to take a more active role in managing the financial side of our own health care.

The New York Times looks at some of these alternatives in “Making Sense of High Deductible Plans“. You should also consider the comments by John Mackey, president of Whole Foods, in his controversial op-ed piece explaining Whole Foods’ approach to health care coverage, a piece that caught the attention of the Obama administration.

Over the years, I’ve repeated ad nauseam my belief that the principal flaw in the health care industry is our lack of individual financial accountability.

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Tomorrow, the Obama Administration is scheduled to announce new initiatives to spur small business lending. Among the initiatives are increasing limits for SBA loan and make it easier for smaller banks to access TARP money.

As we know, the SBA estimates that small business creates 60-80% of new jobs. So, if job creation is number one, access to capital and business building ideas are crucial for small business.

Stay tuned for details.

Sorry, folks, but I do not see any meaningful evidence of a stimulus package, that vaunted $700B jump-start to the economy. I deplored it back then … I think “mud sandwich” was the term I used. Some of us pointed out that Congress’ own calculations showed that most of it would not be effective until 12-18 months elapsed … and now the evidence is in. I’ve also referred to it as another government boondoggle because there is such an obscure line of sight and accountability for the results of the program, that you could just be sure it wouldn’t have the desired results. If you created a program like this for your business, you wouldn’t have either a business or a job.

Even the NY Times editorialized recently about the lack of leadership on jobs. Here are some of the statistics they quoted which are sobering indeed; there’s more but you get the gist:

• September was the 21st straight month of job loss – the longest unbroken stretch of losses since record-keeping began in 1939 – bringing to 7.2 million the number of positions that have been axed since December 2007.

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Finally, a few observers are beginning to get it … that increased reported profits are the result of cost reduction but mask the continuing decline in revenue, which is critical to job creation.

Almost 75% of S&P companies have reported quarterly results exceeding analyst estimates but top line results are slow to rebound. Corporate revenue fell 20% in Q209 after 14% drop in Q408 and 17% in Q109. On a dollar basis, for the 12 months ending June 30, 2009, revenue of S&P companies fell more than $1.15 Trillion – WELL IN EXCESS OF FEDERAL STIMULUS PACKAGE!

Historically, sales seem to hit bottom about 9 months after a recession ends, suggesting no real revenue rebound until mid-2010.

In today’s New York Times, there is an eye-catching picture that will make the nerdiest graphmeister weep. It’s a very unique graphical depiction of the Consumer Price Index. You may not know that the Bureau of Labor Statistics gathers 84,000 prices on 200 products every month to calculate the Consumer Price Index. See it here in living color.

Jack Welch doesn’t need kudos from me, but I appreciate his recent column (with his wife, Suzy), Keeping Morale Up in a Downturn, in the recent issue of Business Week. It focuses on 2 key characteristics that I think good leaders possess: 1] Transparency, referring to a willingness to talk openly and honestly with members of your team, including the good, bad and ugly; and 2] Differentiation, which refers to not only your leadership team – “take care of your best no matter what” – but also applying that same concept to expenditures and investment.

Leaders have a lot to consider in a struggling economy. When you can be easily bushwhacked with the latest industry gossip or monthly performance report, rigorously applying these characteristics will optimize your chances of keeping your team together, focused on a practical strategy to persevere and succeed in an unpredictable economy.