The financial crisis in small towns

Most small towns missed out on the recent run up in the USA national economy. And when we were struck with repeated crop failures and a horrendous local economy, the rest of the nation certainly didn't notice. So, how is the national financial crisis affecting small towns? Well, it's a mixed bag. And it's still evolving.

Small town banks report "business as usual"

Let's start with the view point of Jack Schultz. Jack is a legend in the small town economic development field. No one has a better feel for what is going on in small town economies. He also happens to be chairman of the board of one of his hometown banks in Effingham, Ill. At the start of this crisis, in his Sept 30 Agurban e-newsletter, Jack pointed out that small town banks are completely different from Wall Street investment banks, even though both are called simply "banks." Jack also reported the results of an informal survey of small town bankers from across the USA.

This year [at our customer appreciation event] I made it a point to ask every banker that I talked to (about 8 in all) if the current Wall Street crisis was affecting their lending to small businesses on Main Street. Only one of the eight said that they had tightened their loan underwriting "slightly". The rest were all"business as usual."

The photo here is an actual newspaper ad from our home-town Central National Bank of Alva, promoting their stability.


Not far away, The Woodward News quotes a couple of local bank presidents.

“This is a great time to be in Oklahoma,” he said and chuckled a bit. “The banks here and also in the Midwest in general, are well capitalized,” [Stock Exchange Bank President Bruce] Benbrook said. “ They have been sticking close to home, making good loans to the good people here and we are not in the condition that these other institutions are.”

Those opinions were mirrored by Central National Bank of Enid-Woodward Branch President, Steven Jones.
...
“Especially in the Midwest region, the banks are sound and well capitalized and most of that negative publicity is not going to affect these banks across this area.”

If you detect a note of smugness, there is good reason for it. The answer goes back to the 1980s farm crisis. Here's how small town banker Bill Wyckoff explained it in the Wall Street Journal.

A community bank used to rely on participating loans with large metro banks. For example, if my bank had a regulatory loan limit of a million dollars and I made a two million dollar loan, I would "sell" the over-line to a large bank. These large banks suddenly suspended and called all rural credits. This is probably similar to what is happening to borrowers who use super-large banks in today's panic environment. There was nothing wrong with these loans but every small bank suffered from this irrational wrath.

A group of fellow bankers formed an ad hoc loan-pooling arrangement and we traded loans. Not a dime was lost, no borrowers were sold out and we didn't need a government bailout. It did instill a fierce sense of independence and self reliance.

Now the small town bankers are less than enthused about the bailout plan of today.

Cattle, commodity prices drop

So if our banks are OK, our basic commodity prices aren't. And that hits us where it hurts. The Woodward News quotes Dale Moore, a local cattle producer and feedlot owner-operator.

Moore said he believes the current stock market trend has trickled into the commodities market, such as cattle and wheat, partially because there are some traders in both the stock market and the commodity market and some of those same people are selling everything.

While our local economy may ignore national trends, changes in commodity prices will affect us directly.

Reduced liquidity hurts state and local governments

While the news coverage has focused on the investment banks and individual homeowners, you might not realize that your state government is actually a huge investor in the stock market. Where do you think they keep the state retirement funds?

Here's another report out of Oklahoma, from the Enid News and Eagle:

On Thursday, state Treasurer Scott Meacham said the financialmeltdown is causing Oklahoma’s pension systems to suffer losses andthreatens bond programs for roads, bridges and other vital programs.

Meachamsaid state pension accounts alone face potential losses of $73.4million because of the failure of Lehman Brothers. He said the stockmarket’s tumble this week has increased the losses.

According to Meacham, instability in the country’s financial system is making itmore difficult to sell bonds needed to fund state projects, such as $300 million in road and bridge improvements.

“There are just no buyers out there for bonds; there’s no liquidity,” the treasurer said. He said the lack of financing will drive up the cost of selling the bonds.

Besides the state government, you have local foundation endowments, all manner of pension funds, and every private investor.

Local governments are getting caught in the tight credit market, too. The Woodward News reports that the City of Woodward (a client of mine), is paying higher interest on one new loan, and is having trouble accessing new credit.

“The initial source that we go to as communities for low interest loans for infrastructure can’t access any money-they are unable to provide any types of loans grants for funds to any community till a time unknown at this point,” Riffle said “So yes, we are being impacted in a lot of ways.”

“We are only getting this loan finalized on what they callreputation risk factor,” Riffel said. “It is a credit thing with them [Bank of America] now and lots of local governments are wanting money from Bank of America and not getting it.”

Clean up your personal finance

In case you didn't realize, this should be a big wake-up call for cleaning up your personal financial issues.

But [Central National Bank of Enid-Woodward Branch President, Steven] Jones said this is indeed a time for Americans to take a look at their debt and use debt as the management tool, the way it was designed to be used, especially going into an uncertain national economy.

“Certainly the smaller the debt load the better,” Jones said. “Basically if you are making a lot of payments to me, you are not benefiting from your own money as much. They need to manage their debt and make sure it is not managing them.”

Bottom line

So what is the bottom line? Small towns are not taking the brunt of this blow. Our banks are sound. But we are far from immune, especially in our commodity-based economy. Besides the direct effects on our own investments, our charitable foundations are hurting and our state and local governments are stressed.





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Brag Basket makes promotion fun

EachFriday, I open the brag basket as a fun place to give someone a pat onthe back, brag, or promote yourself and your projects.

Last week, I bragged on a new client, Marc announced Ask Without Fear is getting some great publicity, ethnicomm shared some kindness, Sheila from Family Travelogue bragged up Aruni for her SXSW panel and Sheila's own selection for a cool project, ATX Wintergaurd proudly talked about their summer accomplishments, Michelle of BatchBlue bragged on her team's site redesign, Jen of JenX67 said nice things about Debbie and me, Todd of The Broad Brush and @JavaSTL held a great local Tweetup, Scott earned some awesome press coverage, Paul creatively announced his availability, Pizza For a Dream bragged on Jeff, and we also had Mark of Train for Humanity, Marco of Invoice Factoring Blog and Aruni of Entremusings stop in to cheer.

Willyou put something in the Brag Basket this week? You can brag on afriend, your own project, yourself, others, anything! You don't needspecial permission. Just leave a comment right here.There's no deadline, so you can brag anytime during the weekend, andI'll open a fresh Brag Basket each Friday.

Brag Basket graphic by BJ Novack, KickAss Web Design.

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More Ways to Monetize You, Your Content

Jeremiah Owyang offers an excellent, well-written, post: The many forms of monetization using the web.

Every business take heed. But small(er) business would benefit the most from heeding his advice.

Why?

What makes people want to visit any store, any site, any business...linger and mingle, peruse and purchase, is unique content.

You as a small business are unique. You're an original. That's where you stand out. That's how you survive. It's why your customers care. It's why your employees care.

You have direct relationships with your customers. You talk directly to them. And the same happens with your employees. You talk directly with each other.

That interaction is what creates your unique company. There's no watered-down color-scheme for your brand or website. There's no layers of management silencing the noise that makes your company unique.

You. Unique. You-nique.

Celebrate it with everyone. Exploit it. You're doing everyone a favor. Everyone wants unique, not same, not boring, not safe, not anonymous. Share it. Express it.

Monetize it. Monetize? Make money on it. It's not being unfair. People want unique. And they want it enough to pay for it. So...help them get what they want and you'll get what you want.

Pep talks over. Now comes the work.

And Jeremiah lists all the means you can take your existing content, the YOU, in unique, and monetize it.

Read it.

Hurry up. Your audience, customers and employees, await...anxiously.

**************

About the Author: Zane Safrit's passion is small business and the operationsí excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. He previously served as CEO of a small telecom service provider in rural Iowa. Zane's blog can be found at Zane Safrit. His radio show can be found at www.blogtalkradio.com/zane-safrit.

Is it advertising or is it marketing

By Paul Swansen

What really are advertising and marketing, how are they different, and why are they important to your small business?

According to Wikipedia, "Advertising is a form of communication that typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service."  And Wikipedia says about Marketing, "Marketing theory and practice is justified in the belief that customers use a product or service because they have a need, or because it provides a perceived benefit."  Ok, so there is an official, net definition.

We know Advertising, as all the interruptions that string together our favourite TV shows, and what we hear mostly if we listen to commercial radio while driving around in our cars.  Marketing for many of us is a bit more of a mystery, done in the back rooms and secret labs by used car salesman types, who actually went to college.  Simply, Advertising is a shotgun approach, or, lets throw the spaghetti up on the wall and see what sticks.  Marketing, hopes to introduce you to a product or service you know about and enroll you in your need for that product or service.

I'll assert that most consumers today are victims of advertising, wandering around blindly not really knowing why they purchase and use the brands and products they have in their possession.  Consumers or your customers, wander into the grocery store and are faced with 240 different types and kinds of Salad Dressing and a 16-20' food wall of Bread or Milk.  I'll also assert that much of what the majority of products we purchase have simply become commodities, and have no distinction to us.

I was recently employed in a small business, less than 10 employees, that has been around for seven years.  The family owned business has seen a 30-50% drop in their business in the past year.  Instead of looking at how to stand head and shoulders above the other 300 businesses in this market, this owner was intent on looking like and becoming more and more like all the other businesses.  Not only in the local market, but also looking like and doing business like all the other same business operators throughout the country.  The business owner then wonders aloud to his employees, why things aren't getting any better.

So what's a Small Business owner to do?  As a small business owner, you know your clients almost intimately. You know their likes and dislikes, birthday's, anniversary's, soda and radio station preferences.  I'd assert you don't need to advertise to your core clients, save that for those who aren't aware of what you do, or what you have to offer.  Instead, begin a conversation with your clients.  Yes, talk to them and find out what is working and what isn't working in your business relationship with them.  You might be surprised at the response to your conversation. 

I hope that as a small business owner you'll look to your network and your social networking tools to grow your business.  Yes, you can survive and thrive in these current times.

Please feel free to leave comments and suggestions, and enter into the conversation I've started.

--
Paul resides in Denver with his wife and 2 cats.   Paul is a former, Radio DJ, and Program Director, Television Program Director, Public Affairs Officer, Speech Writer, Award Winning Radio Spot writer, Computer Tech, Event Producer, and Customer Service Guru.  He can also be found on many of the social networking sites as : paulswansen.
http://winksite.com/pswansen/paulsmobile

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Links for small town businesses

Our friend Chuck Huckaby is building an online business directory.

"Any owner of a 'brick and mortar' business is welcome to get another one way link to their store," Chuck said. "I think that in many small towns, just a few extra links would help lift many businesses' rankings. So this is one gratis link that will always remain so."

Chuck said he may offer a paid link option, sometime in the future. Mostly, he wants to build relationships with other small business owners.

So, if you have a brick and mortar business, sign up for Chuck's business directory. I did.

[Photo of my bricks and mortar business, by me.]

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Bugs for sale

Young entrepreneurs are our future. Rural young entrepreneurs, however, can be just a little different. Here's a new twist on the old lemonade stand idea:

LizaJne the boys are out in the yard selling frogs, slugs, grasshoppers and other bugs. they've already made $6.00!

Lessons you can learn:

• Don't believe the grownups who tell you an idea won't work. (I don't think LizaJne told them any such thing, but what grownup would have predicted success?)
• Don't waste too much time in planning. Go straight to market.
• Make the most of the resources around you. Heck, turn problems into products.

What lessons would you add to the list?

[Photo by LizaJne herself. Used by permission.]

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Find your local entrepreneur group

Your business can't survive alone. You can greatly improve your chances by networking with other entrepreneurs. My hometown of Alva, Oklahoma, is working on this, with Fast Forward Fridays.

Alva Area Chamber of Commerce Director Alexandra Mantz explained, "We hope to bring budding entrepreneurs in the region together to talk and find resources that will help them get started."

That's exactly the right reason for small town entrepreneurs to attend these kind of networking events: to make local connection, to share resources, to succeed. 

The coalition of groups working on this event are Oklahoma's Partners for Progress, including:

• Alva Area Chamber of Commerce
• Woods County Economic Development Committee
• Northwest Oklahoma Alliance
• Northwestern Oklahoma State University
• Northwest Technology Center
• Rural Enterprises, Inc. 
• Oklahoma Department of Commerce Business Solutions
  

This is not their first event. Earlier in the year, they hosted a couple of great workshops.

What are the entrepreneur events in your area? Are you participating?

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Share and enjoy in the Brag Basket

Each Friday, I open the brag basket as a fun place to give someone a pat on the back, brag, or promote yourself and your projects.

Last week, Doug at Mitchgroup bragged on a client, Marco announced Factoring Articles, Paul proudly finished a page at TheSeedCompany.org, Sandra of Guiding Vision complimented my presentation, I bragged on Mom, and Todd of The Broad Brush and Vicky of Remarkable Parents stopped by to cheer.

Will you put something in the Brag Basket this week? You can brag on a friend, your own project, yourself, others, anything! You don't need special permission. Just leave a comment right here. There's no deadline, so you can brag anytime during the weekend, and I'll open a fresh Brag Basket each Friday.

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Blog better with advice from Ted Demop

Our friend Ted Demopoulos knows how to make blogging work for business. I named him one of the four small town game changers, using social media tools effectively from a small town.

Ted wrote a terrific booklet, "Secrets of Successful Blogging: 101+ Tips for Blogging more Effectively, Efficiently, and Effectively." He sold several thousand copies, and he's now decided to make an ebook version. You can get it by signing up for Ted's newsletter at http://www.BloggingForBusinessBook.com or http://www.EffectiveInternetPresence.com.

I've listened to his audio CD's on blogging, too, and they are another excellent resource.


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Your 9 am appointment with success

You're got to have a 9 a.m. appointment every day that you work from home.

Without one, it's too easy to let yourself start slowly. Or to get started on the wrong things in the morning. Sometimes you just don't feel like moving. That's why you need a 9 a.m. appointment. Make one every day.

The best 9 a.m.'s are outside the house, face to face with a client, because that means you have to get up, get ready, be professional, and focused on business by 9 a.m.

Now with technology, you may not be that close to your clients. The assignment of a 9 a.m. business appointment still stands, but you have to be creative. Set a 9 a.m. phone meeting. Have an appointment with a sub-contractor, supplier, or advisor. Commit to your co-working partners to check-in at 9 a.m.  I know one successful small town entrepreneur who gets up, gets dressed professionally, and goes to the post office every morning at 9.

I first heard this advice from super successful entrepreneur Gloria Mayfield Banks.

What is your 9 a.m. appointment?

[Photo by me.]

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Apathy and uncertainty stop social media in business

Aaron Strout (@astrout on Twitter) found an interesting article (Still an early market for social media) and a white paper on social media use by companies.

Let me share some of the lead conclusions about social media in companies:

• Social media technologies have the potential to transform the way companies build and manage relationships with their customers. 
• Apathy, fear and uncertainty – more than costs – are preventing companies from formally adopting social media technologies. 
• Social media technologies are invading the workplace undetected. Companies know this, but most have no formal plan to manage them.

Companies that understand the impact of these trends can improve their competitive position in the market. Those that do not adapt to rapid changes or move fast enough to respond to those changes will lose customers and fall behind in the market.

While all of this is being written about and for large companies, I'm telling you that it is also true of small town small businesses.

"Apathy, fear and uncertainty – more than costs" are holding back small businesses from utilizing social media, too.

Zane Safrit laid out a good case for using social media in small business. We're sitting on an advantage, folks. But what are we doing with it? By and large, nothing. Very few small biz folks have done anything with social media.

Are you holding an answer? 

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Get going in business

Are you waiting?

Get on the phone, get on email, get on Twitter, get on with it! Tell people you are now in business. No, I'm not worried that you don't have a perfect website yet. I'm more worried that you don't have any customers, or you only have one. I'm not worried that the timing is wrong, or the economy looks tough. Zane will tell you Today's the Day to Start Your Business.

Know your target and go find them. Get past your existing network. If you are providing service to small businesses, know exactly what kind of small business, what size, and where to find them.


Go get in front of your target people and ask them questions. Learn all about them. Find out what their problems are, what their needs are. Do NOT presume to know what their problems are, even though you are in the business of selling your solution. Each and every business is different, and even if they weren't, each small business person thinks they are different!

So you want to go in armed with a list of questions to start discussion. Let's say you are a social media person, working with small local businesses. Start asking about their current customers. How to they listen to them? What tools do they give customers to give feedback? Are they able to currently reward their fans? How do they know what the larger community is saying about their business?

In order to develop a list of questions like this, you'll need to know not only what you offer, but also what your customers DO with what you offer. I wrote an article about this: Communicate: Ask Better Questions..

So quit waiting. Get going!

[Photo of a new business in Alva, from my Flickr.]

This article is part of the Small Biz 100,a series of 100 practical hands-on posts for small business people andsolo entrepreneurs, whether in a small town, the big city, or inbetween. If you have questions you'd like us to address in this series,leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!


Get the whole series by subscribing to Small Biz Survival.

High Tech OKC OpenBeta Conference

Derrick Parkhurst (Thirty Sixth Span) is organizing a cool high tech event in Oklahoma City, the OpenBeta Conference.

OpenBeta is for technology professionals, entrepreneurs, enthusiasts, and investors based in central Oklahoma who are interested in:

Online Technologies | Web 2.0 | Social Media | Entrepreneurism | Business Startups | Social Networking | Viral Marketing | Blogging | Podcasting | Crowd Sourcing | Web Design | Software Development | Internet Activism | Information Security and Privacy

The goal,  "exposing ideas and creating opportunities by connecting smart, passionate and motivated people with different talents," is classic networking among entrepreneurs. Love it!

This will be on October 30th, from 7-10pm at the IAO Gallery in Oklahoma City. They will start with a tech demo session, where community members will setup laptops and show off their innovative projects. Then the main session of the event will focus on lightning fast presentations given by community members on their innovative ideas and projects.

Maybe I should sign up to do a lightning presentation on social media, or maybe the checklist for starting a business. Hmmm....

Highlight Midwest sounds similar, for the Kansas City area, October 29. Thanks to Grant Griffiths for pointing it out to me.

What are the similar events in your area? Have you been to one like this? What was the best take-away?

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El Dorado Promise

Click to Play

Dr. James C. Fouse directs El Dorado Promise. The promise... go to school, graduate, get a scholarship. He was the guest speaker at the NWOSU Foundation annual donor appreciation dinner, and I asked him about the promise, about how small business can play a role in education, and about El Dorado, Arkansas (population approx. 25,000).

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Brag Basket is waiting for you

Each Friday, I open the brag basket as a fun place to give someone a pat on the back, brag, or promote yourself and your projects.

Last week, we heard from MacPhilly (@phillymac), Gloria, Mark, and Sheila. And special thanks to Stacy, Marti and Marco for helping me out, by cheering for everyone in the Brag Basket! 

Will you put something in the Brag Basket this week? You can brag on a friend, your own project, yourself, others, anything! You don't need special permission or anything. Just leave a comment right here. There's no deadline, so you can brag anytime during the weekend, and I'll open a fresh Brag Basket each Friday.

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