Bank Local

Bankers are not very popular these days. Neither are they considered very trustworthy. A quick search on Google or Bing brings up quite a collection of articles about declining trust. Here are two examples.

• What Banks are Still Missing: Trust, May 4, 2009
• Trust in Banks…gone! How to get it back? November 17, 2010

A healthy mistrust of banking is very trendy. Distrust of large financial institutions is as American as apple pie. The second and third Presidents of the United States were both leery of banks. President John Adams was no friend of banks when he said,

Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.

Thomas Jefferson also had some scathing words.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. 

The problem with the universal condemnation of banks and bankers is that it is misplaced. There are several banking systems. Adams and Jefferson were writing about a national bank. The recent financial meltdown was caused by another type of bank, the “too big to fail” banks and financial institutions. These are the banks that consumer guru Clark Howard calls “giant monster mega-banks.” However, locally owned and community based banks still deserve our trust and respect. If anything good comes out of the financial meltdown and the near collapse of the big banks, it may be a return to banking at locally owned and community based banks. If this happens, then it is part of a larger trend of doing business locally.

Many modern banks and financial institutions are primarily transaction processors and speculators, but those are new roles for bankers. Banks, especially in small town America, used to be the institutions that helped start small businesses and made it possible for people to buy homes. When little boys and girls saved their allowance or paper route or babysitting money, they dutifully took it downtown to the bank, and the friendly banker put it into an account and marked the deposit in a passbook. Banks encouraged people to put money away for a rainy day or to save for big purchases. Before the days of MasterCharge (now MasterCard) and BankAmericard (now Visa), banks encouraged customers to save for holiday shopping with Christmas Club Accounts. Now banks encourage customers to take on high interest rate debt. It is hard to say which came first, the rise of giant banks or the change in social mores from planning and saving to debt. In either case, too much debt is a huge part of the morass in which the world finds itself today. It turns out that easy credit had consequences.

The solution is to return to banking as it used to be. If you know where to look, you can still find a friendly banker. There are still places where children can deposit their allowance into passbook accounts. You can still find bankers that will discuss your business plan and work with you to help your business succeed, and there are still banks that will lend you money because the loan committee knows you personally, and they consider your character as important as your FICO score. A community bank  in Central Texas runs an ad where the banker asks, “Who is your banker?” He’s not asking the name of the bank. He’s asking the name of the person at your bank that knows your name. Do you bank where someone knows your name?

Local and community banks in your town also support neighborhood business. They have a vested interest in the success of the local grocery or pharmacy or hardware store because they shop in those stores. When the banker lends money to someone to open a new restaurant, it is not simply another loan to generate profit for the bank. Instead it is a new business for the community and another place that families, including the banker's family, can go out to eat.

Neighborhood bankers don’t just want local business to make enough money to repay their loans. They want local businesses to be successful so that the community is prosperous. When local banks make a profit, the money stays in the community and supports local business.

If you long for the days of a friendly banker that knows your name and not just your account number, if you want to do business with someone that will take the time to learn your business and wants you to succeed, if you want to bank with someone that is part of your community and not just a branch of some giant corporation, then it is time for you to start banking with the locally owned banks in your community.

Re-post from Sysomos Blog: Why Corporate Social Media Fails

Here's a blog post that I thought was interesting. The post reviews two obvious problems, lack of planning and inadequate resources. It then describes a few other less obvious issues. Certainly the lack of decent content is a problem, but how many companies think about all of the implications of social media. The final item, "The failure to build relationships" is an observation that makes the entire post worth reading.

Social media works well when companies use it to build relationships. Companies that use help encourage customer conversations are successful. Companies that think that Facebook or Twitter are simply innovative billboards are not. Check out the post. Why Corporate Social Media Fails

By the way, this post is an interesting example of the effect of social media. I read a status update on Linked In that referred to this post. The update was also shared on Twitter. The update was from a person that once worked for a not-for-profit where I had been a volunteer. However, I connected with her originally because she was the sister of a respected co-worker. It is a small world, and social media makes it smaller.

Hiring older workers

What did you think when you read the title of this post? Does it seem like a good idea? Is it a bad idea? How do you know? Ignore all of the obvious stereotypes of older and younger workers and take a look at this quote from an interview by Beth Kowitt, on June 11, 2010 in the Fortune Magazine section of the money.cnn.com website.

70% of all money in banks is held by people over 50. That's an example of an industry that's finally coming to realize that a 60-year-old client might actually appreciate dealing with a 60-year-old banker. Other sectors likely to welcome a more mature approach: adventure travel, luxury cars, lifelong learning, or retail.

The same article discusses strategies that retirees returning to the workforce should use and suggests:

sell yourself as a mature person. Stress your capacity to make smart decisions, your good judgment in managing people, your contributions in brainstorming and business development, and your lifetime connections. This is your advantage.

What do you think? Does that sound like the kind of worker that you want working for you? The proliferation of books such as Encore: Finding Work that Matters in the Second Half of Life by Marc Freedman and Don't Retire, REWIRE! by Jeri Sedlar and Rick Miners suggests that more older workers are either choosing to begin second careers instead of retiring, or they are reentering the workforce after retiring. This trend could mean a supply of experienced and knowledgeable workers for your business. Are you in a business sector that might benefit from more mature and experienced workers? Would your customers be more comfortable with older workers?

Finding qualified employees is always a challenge. Recognizing and understanding the trends related to more experienced workers can help you.

Are your customers coming or going?

Business owners need to know something about the people that are their customers or could be their customers. Over the last few decades there has been a decided shift from the north and north east to the south, and in recent years people have been leaving California for other areas. This chart by the Pew Research Center describes illustrates migration flows since 1975. The recent housing bubble and collapse has exacerbated these movements, and as this article in Reuters explains, the Midwestern manufacturing states may recover from the housing crisis more slowly than the Southern states.

Graphic representation really puts these movements into perspective. Check out this interactive map from Forbes showing movement from one county to another in 2008. The outflows from Chicago, Detroit, and Los Angeles startling. The inflows to Atlanta, Dallas, Manhattan, and Seattle are equally startling. It is not hard to figure out which would be the best places to grow a business. You can find the migration for your own county in 2008, by clicking on your county.

Tips on self-employment and working from home

If you have been following employment trends over the last few years, then you are probably aware of two important trends.

1. People in their 50's, 60's, and even 70’s aren't retiring. They are reinventing. They are taking their skills and changing careers. A few recent books such as Encore: Finding Work that Matters in the Second Half of Life by Marc Freedman make this point. There are also a variety of resources such as BoomersNextStep.com that provide services directly to the “Boomer” generation.
2. More people are working from home. This may be because companies are developing flexible work arrangements. It may be because of increased use of contractors.

One thing that links these trends is that many of the “encore careers” that boomers are pursuing involve working at home. Whether this is because a successful career has become the springboard for a second career as a consultant or because the boomer has the experience, knowledge, and skill to negotiate a non-traditional working arrangement, many older workers are not going into an office every day.

This new way of work brings some challenges though, and as Bill Vick from BoomersNextStep.com writes in Self-Employment and Working From Home Legal Facts:

Working from home can be a lot of fun and quite lucrative but there are a lot of things that you need to know from a legal standpoint that will help keep you out of trouble. Things such as managing finances, paying appropriate taxes, and following laws that the IRS has created are all important things that you’ve got to learn.

These are just a few of the question you should ask.

• Am I an employee or a contractor?
• If I am self-employed, how to I handle my bookkeeping and taxes?
• What other laws or rules affect me?

Check out this excellent article from BoomersNextStep.com to get started on the answers to these questions and others. Self-Employment and Working From Home Legal Facts

Green is good business!

The green movement has grown tremendously, and it has become mainstream. This is a trend you need to understand. If you have been reading the business pages over the last several years, you have probably seen a lot of terms such as green building, renewable energy, and sustainability. Not too long ago, conventional wisdom said that going green cost too much. It turns out that conventional wisdom was wrong.

Green is good business!
Who knew? It turns out that it makes sense to conserve energy. Energy costs are high and going higher. It makes sense to conserve raw materials. Reduce, Reuse, and Recycle are not just buzzwords. They are tools to reduce costs. They reduce the cost of hauling away garbage and of storing garbage in land fills. Green also means using renewable resources and local sourcing. These practices can reduce costs too.

Customers like it too. As more people become aware of what it means to be green, they are demanding that the companies they do business with become green. In fact, green has gone from a niche market to mainstream. Customers may even be willing to pay more for green products.

Green has gone mainstream.
If you have any doubt, do some quick research on major corporations that have announced green initiatives. Among the companies that are going green are CSC, BP, GE, Marriott, Verizon, Wal-Mart, and more. Local governments across the country are announcing green initiatives.

What does this mean for your business?
The growing green movement is an opportunity for you. You should think about doing two things.

1. Understand what it means to be green.
2. Figure out how to satisfy your customers' desire to be green.

Understand what it means to be green.
Understanding what it means to be green is both easier and more difficult than you might imagine. There is a lot of really bad information floating around. Get your information from a variety of reputable sources. One place that you can start is on my Help being green blog. There are a lot of resources posted on the right side of the page.

Don't be afraid to ask questions, and be assured that you know more than you realize. You will learn that a lot of things that have to do with being green are pretty simple.

Figure out how to satisfy your customers' desire to be green.
This could be as simple as letting your customers know about  your green practices. However, depending on the type of business you have, you may also want to evaluate your product mix. Leaning what your customers want may be a challenge, but you can begin by looking at approaches used by other businesses. In addition, if your customers know you are thinking about going green, some of them will be happy to tell you what they want. Ask them.
 
Remember that conventional wisdom that going green cost too much? It turns out that not going green might cost you even more.

Slow Money

Have you heard of Slow Money? Does it even make sense to you? Modern life is supposed to be fast paced, and business is supposed to be about getting deals done. If we even think of the speed of money, then we think back to introductory macro economics courses where the professor droned on and on about velocity of money, and faster was supposed to be better. The Slow Money movement has been around a while, and it has been building slowly. (How else?) It is a trend small business owners need to understand.

So what is Slow Money?
According to John Tozzi, in his post Big Ideas for 2010  on the Successful Entrepreneur Blog, Slow Money is an example of two emerging ideas:

1. New ways to finance social ventures
2. Local capital markets

Tozzi in an earlier article, Slow Money, Local Business, and Social Capital, described the slow money movement and observed:

The emerging model involves several trends we’ve been tracking for a while: crowd funding, community development capital, buy local movements, and for-profit social enterprise.

The idea behind Slow Money is that people ought to do business where they live and eat and work and play. In many ways, the movement is a reaction against growing globalization. In addition, people are beginning to question whether it was a good thing to replace family farms with giant industrial agriculture factories.

This is what the Slow Money Alliance has to say on their website.

Slow Money's mission is to build local and national networks, and develop new financial products and services, dedicated to:

• investing in small food enterprises and local food systems;
• connecting investors to their local economies; and,
• building the nurture capital industry

What might this all mean to you and your business?
The values that are the foundation of the Slow Money movement are embodied in the belief that people are part of a place. That belief is not at odds with the idea that individuals are part of a broader national or even global community, but it does question whether bigger is always better and whether the constant search for cheaper and faster is worth the tradeoffs in quality that sometimes occur. The many “shop local” movements springing up around the country are evidence of a desire for the things the Slow Money movement describes. So too are the twin movements to reclaim small town America and to create livable cities. Small villages and towns all over the United States died as large corporations displaced locally owned stores agribusiness took over family farms. It is up to small business to get back into the marketplace. In many places, as people rediscover small town or village life, some of these places are coming back to life. This is not just a rural or suburban movement. In cities, corner grocers and soda fountains and drugstores with lunch counters were displaced by giant chains. Today, however, locally owned stores are returning.

The reason that this is important for small business owners is that locally business is small business. The Slow Money movement is all about supporting small business and “connecting investors to their local economies.” You need to know all about Slow Money, because Slow Money is all about you.

Book Review: Younger Next Year

Younger Next Year: A Guide to Living Like 50 Until You're 80 and Beyond
By Chris Crowley and Harry S. Lodge, M.D.

I was skeptical when I first heard about this Younger Next Year. There are so many books about healthy lifestyles or dieting or exercise, I’m not sure the world needs more. I’ve also grown weary of every new age bit of hocus pocus that seems to show up on the best seller list and talk show circuit. The guides supposedly based on medical research are not any better. One day caffeine is bad, so we are all supposed to give up coffee and tea, and then the next day it is good. Alcohol used to be bad, now wine is good. As far as food types go, choose your poison: carbohydrates, fats, or protein. It was refreshing to read a book that distilled it all down to something simple, “Quit eating crap!” Then to top it off, the authors continue to tell it like it is by reminding us that we really do know what is good to eat and what is not. They also remind us that deep down inside our genes, we know we need to get moving. We just weren't made to sit on the couch in front of the TV all the time.

Younger Next Year is a great book. It is not just another diet or lifestyle book. It will give you something to think about. It was fun to read.

I heard about this book on a cross country skiing and camping trip in the Boundary Waters Canoe Area Wilderness in Minnesota. I’m fairly active, so wandering about on the lakes and in the woods of the North Woods is fun for me. One of the people on the trip mentioned the book, and it sounded interesting.

The basic premise is that our whole understanding of aging is bunk. We seem to have this idea that people begin some sort of downhill slide sometime before they reach 50. Then when they reach 50, their bodies really begin failing so that life is really a gradual and pathetic descent into painful decay. Upon reaching retirement people can look forward to a feeble existence living out their days in a nursing home. Look around. That’s just not true for everyone. It is not even true for most. Sadly it is true for too many. It does not have to be this way.

Chris Crowley and Harry Lodge got the idea for the book after Chris went to Dr. Lodge for a checkup after retiring. Like many people, Crowley needed to make a few adjustments to his lifestyle. Unlike many people, he really listened when the doc gave him the news. It turns out that many of the things that we think of as normal aging are actually the result of our behavior. The majority of illness, it seems is caused by our modern lifestyle. A few simple ideas can help us stop and even reverse that “normal” decline. In the book Chris describes his story in an entertaining fashion. Harry explains the science behind what Chris says. It is sometimes thoughtful and often witty. Neither of them pull their punches.

The book leaves the reader with a solid take away. The basic guidelines are all wrapped up in Harry’s Rules. There are seven of them. I’ll list them here, but you will get a lot more out of them if you get the book and read as Chris and Harry describe them. If you want a preview, then check out their website. The book has turned into quite a sensation. Chris and Harry now have a website, blogs, and even speaking engagements.

Harry’s Rules

1. Exercise 6 days a week
2. Do aerobic exercise 4 days a week
3. Do strength training 2 days a week
4. Spend less than you make
5. Quit eating crap
6. Care
7. Connect and commit

Check out the book. No matter how old you are today, 30, 40, 50, 60, 70, or more, you can be younger next year. By the way, the guy that told me about the book was retired. He said that trips like the winter camping trip we were on was part of how he stayed young.

Small business and the shop local movement

Once upon a time in towns and villages and small cities all over the United States, people shopped at stores owned by their neighbors. People ate food that came from nearby farms. Do-it-yourself types frequented local hardware stores as much for the free coffee and advice as for boxes of nails. If people needed a loan, then the bank president, or at least the loan officer, knew them. Of course this was before the creation of the superstore. It is now possible to go to giant stores stocked with a tremendous variety of low cost items. We can shop for eggs and milk, and then we can step just a few isles over to shop for clothing or office supplies, or electronics or furniture, or auto parts or just about anything.

While the megastores may have big selections and low prices, they have their own price, one that is not so obvious. Grocery stores, pharmacies, banks, hardware stores, dress shops, children’s clothing stores, restaurants, and the like used to be part of the community. Now the local managers of these national and international corporations may be neighbors, but the stores themselves have no ties to the community. Decisions about our towns and our lives are made in corporate headquarters far away. The profits made by the stores are sent to corporate offices in other places. The neighborhood grocer or drug store or hardware store can’t sponsor children’s baseball and softball leagues, and they can’t donate to PTAs because they don’t exist. Neighborhood children can’t get jobs because all of those everyday low prices don’t leave enough margin to pay students to work after school. This is changing.

Get ready for the backlash
People are getting tired of shopping in huge stores. They are beginning to recognize the Faustian bargain implicit in purchasing only for low prices. People are longing for the community they lost when the locally owned stores closed. They want to know where their food was grown.

There are entire movements dedicated to the concept of “shop local.” For example in Austin, TX, the Austin Independent Business Alliance has the motto, “Local Spoken Here,” and they include this quote on their website.

Shopping at locally owned businesses puts three times the dollars into our economy. A landmark study found that of $100 spent at a local business, $45 stays in the community. But that same $100 spent at a chain store would put only$13 in our local economy. Don't give your money away, keep it in our community.

The movement recognizes that it makes sense to pay a little more for quality too. Michael Pollan, in his book In Defense of Food, observes that it might be a good idea for people to spend a little more on food if it enables them to eat higher quality food.   The idea of locally grown food is also becoming more appealing. Many consumers around the country are shopping at farmer’s markets or joining farms involved in Community Supported Agriculture (CSA). Slow Food USA is a national organization that encourages eating locally produced food. Another organization with a broader focus is the Slow Money Alliance.

Consumers are also embracing new businesses that understand the value of shopping local, high quality, and local sources. One of these businesses is Greenling.com. Greenling is a grocery service that sells certified organic or local and sustainably produced food and delivers it to your door for free. Greenling is more than that though. Greenling embraces the idea of community and recognizes that its customers are its most valuable resource. Greenling hosts periodic get-togethers to showcase food and vendors, and it encourages customers to submit recipes or even to blog about their experience.

Food is gone as soon as we consume it, but the idea of paying more for quality for durable goods should make sense to everyone. The same concepts of paying for quality and staying local apply in other areas too. Consider buildings. The US Green Building Council (USGBC)  recognizes that using local building materials makes more sense than paying to ship supplies long distances by including local sourcing in the LEED rating system.

What does this all mean for small business?
Small businesses should benefit from this trend for one simple reason. They are the locally owned stores and businesses that consumers are returning to after their fling with the megastores. If you as a business owner want to take advantage of the trend, then you need to understand why people want to buy local, and you need to support them so that they can support you. Here are two key points.

• Customers buy local because local businesses are part of the community: Be part of the community. Be a friendly neighbor. Learn the names of your regulars. Support community activities like PTAs, softball and baseball teams, high school sports teams and local charities.
• Customers buy local to support the local economy: Support the local economy. Buy local. Give students after school jobs. Be an active part of the local business community.

As people continue to become disenchanted with big faceless corporations and return to local merchants, it is up to you to welcome them back and to make them glad they came home.