Category: Entreprenuers

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5 Challenges for America’s Businesses in a Global Market

american-flag-businessFor almost 200 years, America has enjoyed global leadership in science, commerce, and government. As a consequence, the United States has become one of history’s greatest economic powers, dominating the 19th and 20th centuries. The ability of Americans to “think outside the box,” their courage to challenge conventional thinking, and their confidence to persevere despite numerous setbacks has inspired generations and continues to change lives around the globe.
 
Leaders understand that greatness is more than building personal wealth or power, but creating products and services that improve the lives of individuals and the overall human condition. But as trade barriers between countries have fallen, leaders are faced with new challenges, and America’s preeminent status as the world’s dominant economy has been and will continue to be challenged as never before.

21st Century Challenges for America’s Businesses

There are a variety of factors that may negatively affect the competitiveness of American firms in the coming years, including three identified in McKinsey Quarterly:
 

1. Dynamism in Emerging Markets

The world has become “flatter” with the disappearance of natural and artificial borders that protected local and regional markets. As a consequence, markets are worldwide and more competitive, as economist and “New York Times” columnist Thomas L. Friedman predicted in 2005.
 
Within the next decade, China will be home to more large companies than either the United States or Europe, with almost one-half of the companies on Fortune’s Global 500 list of major international players hailing from emerging markets – a 900% increase in 20 years. The emergence of nearly two billion consumers in the emerging markets will create markets in their home countries to support aggressive international growth.

2. Technology and Connectivity

Moore’s Law – a computer term professing that overall processing power doubles every two years – is alive and well, and may prove to be conservative. According to SingularityHUB, many computer scientists project that the world’s first “exaflop” computer will be available before the end of this decade. An exaflop computer will perform a quintillion operations a second – the inputting power equal to the human brain.
 
As a consequence of the anticipated quantum leap in computer power, businesses can start and gain scale with stunning speed while using little capital, value will rapidly shift between country and industry sectors to reflect the constant changes, and entrepreneurs and startups will have new advantages over large established businesses. The life cycle of companies is already shortening and decision making has never had to be so rapid fire.
 
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Do You Have Something to Say?

writing a bookFrom the Neanderthals who left hand prints on the cavern walls of El Castillo, Spain more than 37,000 years ago, to the G.I.’s crude drawings of a long-nosed fellow peering over a fence announcing, “Kilroy was here,” humans have sought immortality through art. The same impulse that drives the graffiti tagger in Los Angeles drives the white-haired Hamptons matron to pen a letter to the local newspaper about animal leash laws: a desire to be seen, heard, and remembered.
 
The digital revolution gives us an opportunity to communicate and disseminate ideas, concepts, and opinions without intermediation. Today, every wannabe Stephen King, Tom Brokaw, or Larry McMurtry can write and publish as they please. Grandfathers and grandmothers can pass down family stories to younger generations. The entire world has an opportunity to become both more knowledgeable and more expressive than ever before.

Technology and Self-Publishing

The first electronic book – Peter James’ thriller “Host” – appeared on two floppy disks in 1993 and sold 12,000 copies. Five years later, the first e-readers appeared with mediocre market success. Amazon, the world’s largest book retailer, introduced the Kindle reader to America in 2007, forever changing the dynamics of book publishing. Today, electronic books can be viewed on a variety of readers, mobile phones, tablets, and computers.
 
In the first quarter of 2012, net sales of ebooks exceeded hardcover sales across the industry for the first time. While paperback books remain the industry’s most popular format, their dominance is likely short-lived – according to Mashable, Amazon’s ebook sales surpassed paperbacks in the fourth quarter of 2011. The reason for the ebook’s dominance is clear: Production costs are lower and profits are higher (despite the fact that ebooks typically sell for less than half of what hardcovers sell for).
 
With the full support of Amazon, authors have rebelled against traditional publishing houses, seeking a higher percentage of royalties or threatening to publish on their own – Bowker Identifier Services claims that self-published book titles grew 60% from 2011 to 2012 alone. Writers who never thought they would be able to publish are taking advantage of the new technology.
 
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6 Tips to Starting a Business in a Foreign Country

start-business1The combination of inexpensive technology, accessible virtual markets, and easy funding through crowdsourcing is changing the face of entrepreneurship. Today’s new business starters are socially sophisticated, willing to bear more risk than previous generations, and more likely to work out of a home or small office and rely on others for business processes. Some are small guerrilla outfits surfing from one hot concept to the next, and some are venture capital-funded geniuses with disruptor ideas.
 
It is a great time to start a new business – the best time in history.

The Keys to Success

America has always been the land of opportunity, the Mecca for entrepreneurship. While great fortunes have been made by immigrants and first-generation Americans such as Andrew Carnegie in steel, John D. Rockefeller in oil, and William A. Clark in copper, thousands of others formed successful small companies that provided financial security and employment for hundreds of thousands of their fellow citizens.
 
The possibility of being responsible for one’s own fate has never been greater in the history of the country. Latent opportunities for new ideas and businesses have exploded exponentially, each new concept and novel interpretation of old methods pregnant with possibility, just waiting to be birthed. There are several key reasons why this is so.

1. Cultural Accommodation

For much of history, capitalism was restricted to the beneficiaries of high birth, ancestral wealth, and exclusive education. The wide-open spaces and untapped resources of the new continent in the 19th century shattered cultural norms that had existed for hundreds of years. Entrepreneurs flooded the country, exploiting new resources, new markets, and new technology to create the greatest industrial nation in the history of the world.
 
Despite the success, access to these new possibilities was unfortunately generally limited to white males. Minorities (except in their limited communities) and women were excluded, restricted by racial prejudice, cultural stereotypes, and inefficient educations.
 
America in the 21st century is a more open society and access continues to broaden regardless of sex or ethnicity – anyone smart enough and brave enough to create a new business can try. According to a 2013 American Express report, there are 8.6 million women-owned businesses in the country, generating more than $1.3 trillion in revenues and providing jobs for 7.8 million employees. The rate of growth between 1997 and 2013 in new women-owned businesses has been one and a half times the national average. In a U.S. Census News release in 2011, Tom Mesenbourg, deputy director of the U.S. Census Bureau, proclaimed, “The growth in the number of minority-owned firms – both employers and non-employers – has far outpaced that of businesses overall.”
 
Led by federal and state governments, programs to assist potential new business owners are readily accessible and generally free. An entrepreneur can access classes ranging from basic accounting, to sophisticated product and service contracting. Face-to-face onsite mentoring is available from organizations such as S.C.O.R.E., while municipalities, colleges and universities, and private businesses offer incubator facilities with administrative and accounting assistance at low cost. Federal laws require that a percentage of federal contracts be subcontracted to small businesses and provide detailed contracting assistance for those individuals and companies who seek such work.
 
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My interview with Savvy Investor James Molet

Rendezvous With RetirementA friend of mine and fellow financial blogger,James Molet, recently interviewed me for his blog RetirementSavvy. James provides good information and advice over his blog. He is also the author of Rendezvous With Retirement. Here is a portion of the Interview:
 

What was the catalyst that started you on the road to fiscal fitness?

As the beneficiary of an industrial engineering degree and a unique 2-year training program on Wall Street, I was able to grasp the importance of financial matters early in my career. By age 35, I had founded several publicly traded companies, primarily in the oil & gas industry, providing me with a high 6-figure income and a net worth in excess of $10 million. In the oil bust of the early 1980s, I lost everything, declaring personal bankruptcy as a consequence.
 
Realizing that the acquisition (or loss) of wealth was a consequence of luck as well as effort and intelligence, I determined that knowing when to sell was just as important as the decision to buy, especially if you dealt in volatile investments. As Kenny Rogers sang in his song The Gambler, “You got to know when to hold ‘em and know when to fold ‘em.”
 
Those experiences forced me to examine my investment practices and realize that there are no guarantees in life or investments. It is, as Warren Buffett famously claims, the first Rule of Investing: Don’t Lose Money. Today, I always analyze the downside possibilities before I consider an investment.
 

What is the one personal finance concept you believe someone seeking financial freedom should understand and practice?

While a cliché, every investor should realize that the path to financial freedom is a marathon, not a sprint. Chasing immediate rewards requires assuming inordinate risks and increases the possibility and probability of loss. Wealth is built by the constant application of tested financial principles: consistent savings, diversification, tax minimization, and expense control.
 
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