WASHINGTON - Small businesses are still waiting for the economic rebound that's enabled larger companies to obtain low-interest credit and to boost exports and production in recent months.

Smaller companies aren't much more optimistic than they were in the depths of the recession, according to a survey released Tuesday by the National Federation of Independent Business.

That pessimism is slowing job creation and likely weakening the recovery, economists say.

The NFIB's small business optimism index fell 1.2 points to 86.8 in March, the lowest level since July 2009. That's a sharp contrast with other surveys showing larger companies rebounding.

"The March reading is very low and headed in the wrong direction," said William Dunkelberg, chief economist at the NFIB. "Something isn't sitting well with small business owners."

Small businesses account for about half of gross domestic product. Firms with fewer than 50 employees historically have created about one-third of new jobs, according to Scott Brown, chief economist at Raymond James.

The NFIB's index has been below 90 for 18 straight months, the longest sub-90 period since the survey began in 1973. It fell below 90 for only one three-month period in the steep 1981-92 recession.

Small businesses cite weak sales and uncertainty about the economic recovery as their leading concerns. Obtaining loans also remains difficult for many NFIB members. Fifteen percent said credit was harder to get than the last time they sought loans, the NFIB said, up from 12 percent in February.

On a more positive note, many small companies appear to have stopped laying off workers. The NFIB's members reported no change in employment in March, after shedding workers every month since July 2008.

But with sales and earnings weak, few are ready to hire. Over the next three months, slightly more said they planned to cut workers than add jobs, on a seasonally adjusted basis.

Roger Gerick, owner of Freightmovers in Tyler, Texas, with around 300 people on the payroll, doesn't expect to hire in coming months. Business hasn't picked up enough to warrant it, he said.

"Politicians say the economy is recovering, but my sales people can't find it," he said. "They just can't find this expansion."

During the lean times of the recession, Gerick says his company managed to survive by pursuing new work, such as hauling kitty litter, raw materials and used medical equipment.

The Institute of Supply Management, a trade group of purchasing executives at large companies, said earlier this month that surveys showed both the manufacturing and service sectors are expanding at a healthy clip.

"The recovery might not be quite as impressive as those ISM indices currently suggest," said Paul Ashworth, senior U.S. economist at Capital Economics. "The truth ... is probably somewhere between" the ISM and NFIB surveys.

Great advertising campaigns, like great companies, are always rooted in a big idea. The trick is to make sure they're in sync

Mere semantics? Not at all.

As a young company takes root and expands, it begins to establish its brand. With each passing day, the things it does enhance (or detract from) the value of that brand. Over time, that equation begins to work in the opposite direction as well, and branding can be used to enhance the meaning and value of the company. But for this process to be effective, the business and the brand must remain intertwined.

The world's best marketers understand that as valuable as their products and services are, products and services come and go. Brands, however, live on indefinitely. As a result, they invest in and celebrate and protect their brands in every way they can, wrapping them around big, everlasting ideas.

Apple's (AAPL) animating idea is innovation. Whether it's the design of the iPhone, the functionality of iTunes, the customer experience in the Apple Store, or the light humor of the "Mac vs. PC" ads, the company is all about providing pleasant surprises to its customers. As a result, Apple has a legion of loyal followers and is able to command premium prices for its offerings.

Intel's (INTC) big idea is performance. The chipmaker is determined to never be outperformed by competing technology on things like speed, energy efficiency, and adaptability. That's why when a computer sports an "Intel Inside" badge, people are more apt to trust it, even if (or perhaps because) they know little about the workings within.

Foundation for Lasting Success

For Wal-Mart (WMT), the idea is savings—a concept the company has so effectively owned over the past 48 years that it became the world's largest retailer. Occasionally it loses sight of its originating idea, but it always returns to the core.

What these and other dominant companies know is that sustainable success is built on the foundation of a singular idea, around which everything they do is oriented. Advertising is just one of those things.

Sometimes, as in the case of General Electric (GE), the company is closely associated with an actual word ("Imagination"). In other cases it's the underlying concept that's important. You won't see Nike (NKE) highlight the word "motivation" in its advertising, but motivation is what the brand ("Just Do It") is all about. Leading companies like these filter their strategic decisions around their evergreen, animating ideas, which enable them to sustain success over time.

Why do people drink Coca-Cola (KO)? For some, it's a matter of taste. For others, it's how well Coke quenches their thirst. Still others like the jolt they get from the formula's unique combination of sugar and caffeine. How can Coke effectively market to all the different people who choose its product for their own personal reasons? By planting its flag in an idea with which no one will take issue: happiness.

It's hard to argue with happiness. It's hard to be against happiness. And it's hard to find anyone who doesn't like happiness. Coke has decided to equate its brand with happiness, and orients its product, packaging, and promotion in that direction. (Ever see a "Happiness Machine"?). In a fast-paced, pressure-filled world, anyone can take a moment to "Have a Coke and a smile." (If that old slogan sounds familiar, it only proves the point.)

Your Animating Idea

GE puts its commitment to imagination this way on its Web site: "From jet engines to power generation, financial services to water processing, and medical imaging to media content, GE people worldwide are dedicated to turning imaginative ideas into leading products and services that help solve some of the world's toughest problems." As awkward as the company's major initiatives (Ecomagination, Healthymagination) sound, they further reinforce the idea around which the company is based. "For GE, imagination at work is more than a slogan or a tagline," CEO Jeff Immelt says on the site. "It is a reason for being."

Happiness. Motivation. Innovation. Performance. Imagination. Savings. These aren't advertising ideas; they're business ideas that have advertising implications. If you want your advertising to be more effective, ensure that it's rooted in the idea that animates your company. If you're not sure what that idea is, it's probably related to why you got into business in the first place. Rediscover your animating idea, make sure it's still sound (see "How Solid Is Your Brand?"), and orient everything you do around it—including (but not limited to) your advertising.

If you can prune away everything else and sharpen the point on your animating idea, your advertising will do its job better than you ever imagined.

Area rich in natural resources, entrepreneurial spirit


CHICAGO - Longstanding stereotypes of Appalachia conjure images of a backwater region blighted by poverty. Now the state of Ohio is working to change that perception by promoting the region as an emerging hotbed for startups in industries such as high tech and alternative energy.

Entrepreneurs like Craig Newbold, a software developer who grew up locally in the town of East Liverpool along the Ohio River between Youngstown and Pittsburgh, are betting on the area's future. Newbold returned home after retiring from an information technology career in Seattle to found software development firm Newbold Technologies in 2003, with the aim of creating local opportunities.

"To me, areas like this have a lot of diamonds in the rough," said Newbold, whose father made his living running a local filling station in the area once known as the ‘pottery capital of the world.' "People that want to live here have the aptitude and the ability, but need to be developed."

"We've created a domestic option to the Indian market," said Newbold. "What we're doing is creating an opportunity, at least in the technical field, for people to stay here."

Ohio has begun a new promotional push to bring entrepreneurs and investors to the historically industrial but blighted Ohio Appalachian region, which encompasses 32 central and southern counties that border Kentucky, West Virginia and Pennsylvania.

Home to old-line automotive and food-processing industries, the area was hit hard by the recession. The average income in East Liverpool's Columbiana County is $36,610, well below the Ohio state average of $48,098, according to recent government data cited in the Columbus Dispatch.

Entrepreneurial spirit
Among the region's positive features are abundant natural resources, major transportation routes such as the Ohio River and easy access to cities like Columbus and Pittsburgh. Perhaps most appealing to cash-strapped entrepreneurs are the comparatively low costs for rent and skilled labor.

"The region will stand up very well," said Ed Burghard, executive director of the Ohio Business Development Coalition, a nonprofit group charged with promoting the state's economy. "Here you can reach 70 percent of the North American population."

In addition, federal stimulus dollars are helping to finish a highway bypass for Route 33 around Nelsonville in Athens County, a multimillion-dollar project aimed at bringing more economic development. Tax laws are also favorable. Ohio charges no levy on a company's first $1 million in sales and no tax on goods sold to customers outside the state, two of several benefits resulting from sweeping tax reform in 2005.

Burghard said area residents, including many skilled laborers, have long demonstrated ingenuity in the face of limited resources and capital, from Prohibition-era whiskey stills to quilting, pottery and homemade canned goods. "If you look at the history of the region, it's marked by entrepreneurism — the concept of working for yourself," said Burghard, whose organization has been coordinating with local institutions such as Ohio University and the Foundation for Appalachian Ohio to help foster entrepreneurship.

Youngstown, often associated with the depressed U.S. automotive industry, has been recognized as one of the top-10 cities for entrepreneurs by Entrepreneur magazine.

The state recently launched an Enterprise Appalachia Web site here to help create broader awareness of the area, which during the downturn suffered a decline in manufacturing jobs and state budget cuts that resulted in layoffs.

"It's going to take some time," added Burghard, who expects the transformation of the area into a seedbed for new ventures "will be a 15-year process."

Attracting investors
Those involved in bringing capital to this rural and often impoverished portion of the state said support for small and mid-sized businesses has been getting stronger over the past decade.

"Deals have gotten done; companies have grown and been successful," said Lynn Gellermann, an investor and president of Athens-based Adena Ventures, a $35-million early stage venture capital fund focused on Appalachian tech startups. "There's just a whole lot going on here now versus 10 years ago."

Adena has run point on a variety of local deals, creating syndicates that have brought in non-Ohio investors such as SJF Ventures of Durham, N.C., OCA Ventures of Chicago, and Mountaineer Capital of Charleston, W.Va., to name a few. Its portfolio includes ventures like Ed Map Inc., a provider of software that manages and distributes educational resources, and Game Plan Technologies, which offers coaches software to analyze game-related video and statistics.

The area has also attracted large corporations such as Boeing, TaTa, General Electric and Dow Chemical, which have invested in facilities in the area.

"I believe the region is poised at this point for the creation of many more startups, technology or otherwise," said Gellermann, who also serves as executive director of TechGrowth Ohio, a $15-million initiative that provides operational assistance to fledgling tech ventures.

In part, he points to the development of incubation centers such as Ohio University's Innovation Center and the Muskingum County Business Incubator among several regional catalysts for new technologies.

In Athens, a cultural oasis that likens itself to the "Berkeley of the Back Woods," the Ohio University Innovation Center now boasts some 13 resident companies, including several ventures seeded from university research. In 2008, the program generated 378 jobs and $15.9 million in labor income.

"Our community acts almost as a laboratory," said Jennifer Simon, the center's director. "We have companies run by faculty, companies that have university-based technology, and also individuals who were working out of their garage … and wanted a place with a professional presence to grow."

One recent success story occurred in January when Diagnostic Hybrids, a maker of medical diagnostic tests to detect flu and respiratory viruses that resided at the center for 20 years, was purchased for $130 million by Quidel Corp.

Despite such bright spots, significant hurdles remain. According to a recent Columbus Dispatch report, some counties in the area suffered double-digit percentage income losses during the recession, following a sustained period of improvement. Big job losses occurred in 2007 and 2008, when local auto-parts factories eliminated more than 600 jobs, the newspaper reported.

Innovators like Simon are undaunted by those trends.

"We still have pockets of poverty, pockets of unemployment," she said. "We're really changing that. We're really on a par and growing."

Having a presence on the mobile Internet is increasingly vital for a local business. Millions of consumers now search on their iPhones, Blackberries and other mobile devices to find what they need. In its first year, for example, the DexKnows.com mobile app saw local business searches skyrocket.

But standard websites don’t convert well to tiny mobile phone screens – they are slow, hard to read and hard to load. To gain traction with mobile consumers you need a streamlined site designed specifically for the mobile web – a costly and time-consuming step most local businesses have delayed taking.

One way to get a powerful and effective mobile presence instantly and cheaply is to register and set up a .tel domain for your business or brand. This is not like other domains or websites. The .tel domain is completely standardized. Everyone’s site looks essentially the same, listing phone contacts, store of office locations, email addresses, websites, social networking pages, map location link, special deal information and – importantly – keywords.

Riding off yesterday's post, "The Importance of Small Businesses Exporting," and questioning U.S. Secretary of Commerce Gary Locke's example of Caterpillar Inc. as a successful small business exporter, you must read this article by Emilia Istrate for The New Republic:

Recap of the latest on why small businesses should export. Looks like we're building momentum and getting a little traction:

Small businesses: Exporting to extend reach (Chicago Tribune)

Key quote: "If small businesses can sell more, they'll produce more, and more people can find work."

Size no barrier to export success (The Australian -- great little article)

Key quote: "Resourcefulness and self-belief are the keys to victory for small businesses in the global market."

Commerce secretary uses Cat subsidiary as export example (Peoria, IL, pjstar.com) ... somebody help me out here ... how does Caterpillar (mining truck shown above) represent a good example of a small business?

Key quote: "When traditional drivers of U.S. economic growth like consumer and business spending are facing headwinds, increasing exports must be a central part of America's economic recovery and job creation efforts."

Posted by: Global Small Business

Can the new wave of entrepreneurship worldwide be sustained? Read more (however, to read most of the material in its entirety, you have to become a subscriber except for what we preview below -- shame on The Wilson Quarterly for cutting off a great deal of our thirst for knowledge) at the Spring Edition 2010 of The Wilson Quarterly.

For 30 years, the United States has ridden a spectacular wave of technology-based entrepreneurship. Now, with economic lethargy at home and rising challenges abroad, can the wave be sustained?

• China’s Other Path by Yasheng Huang
  

The Enterprise of Nations

by David S. Landes

Critics have tried to explain away the West’s centuries-long economic domination of the globe; they would do better to study its lessons.

Fast-food in China and it's expected to increase by 10% this year as the middle class in that country grows.

Read how McDonald's plans to nearly double the number of Golden Arches locations in that highly coveted market.

McDonald's Seeks a Chinese Fortune

Related article here: McDonald's to Double Restaurants in China

Interesting sidenote!

Posted by: Global Small Business

Why do I feel like the whole world is catching up to us on the importance of entrepreneurs and small businesses taking their business global?

Take this special report on America's economy entitled, "Export or Die," published by The Economist (3/31/10). It drives home the point that with demand dwindling or in some instances totally disappearing on a local level, American firms are looking abroad to grow their business.

A quick snippet from the report:

More American companies will have to look abroad. They are the least likely to export out of 15 big economies, according to the National Association of Manufacturers, a trade group. Matthew Slaughter of Dartmouth College notes that only 4% of all American firms and 15% of American manufacturers do any exporting at all. And 80% of America’s total trade is conducted by just 1% of firms that export or import. This does not mean there is something wrong with American firms.

What interests the social entrepreneur? Take a peek:

... what defines the true social entrepreneur is that he or she simply cannot come to rest in life until his or her vision has become the new pattern society wide. Scholars and artists are satisfied when they express an idea. Professionals are when they serve a client well, and managers are when their organization succeeds. None of this much interests the entrepreneur. The life purpose of the true social entrepreneur is to change the world.

There's Doctors Without Borders, Teachers Without Borders and Scientists Without Borders, to name just a few of the many borderless initiatives that exist. Why there's even Mothers Without Borders! And of course, there's us: SMBs that operate without borders.

But did you know? There are lawyers that see a borderless world when it comes to offering free, or pro bono, work on global legal troubles. Guess what they are called? Lawyers Without Borders.

Read about this new twist here.

Photo credit: Peter Max "Without Borders" painting

Posted by: Global Small Business

With international Web sales lagging behind major competitors such as Amazon, Wal-Mart is stepping up its overseas e-commerce expansion, looking for staff, talking to vendors and mapping its approach to what could become the world's biggest Internet initiative.

Rest assure we will be reaching out to them to assist because we know exactly how this should be done.

Snapshot from article:

Wal-Mart already pulls in the most sales of any retailer—$405 billion last year, including about $100 billion from international operations in 14 countries. While the company doesn't disclose Internet sales, indications are the retailer has a lot of growing room. Trade publication Internet Retailer estimated that Wal-Mart's e-commerce sales in 2008, the latest projection available, were $1.74 billion. That compared with No. 1 ranked Amazon.com Inc. at $19.2 billion and No. 2 Staples Inc., at $7.7 billion. Other brick-and-mortar retailers like Office Depot Inc., OfficeMax Inc., Sears Holding Corp. and Best Buy Co. outranked Wal-Mart in Web sales, with Wal-Mart entering the list at No. 13. This was before Wal-Mart said it was making a great push to improve online sales.

Imagine all that and more with Adventures By Disney. ABD takes families (listen up global small business owners ... a vacation may be just what you and your loved ones need!) on guided tours, discovering the world like never before.

Learn more:

Go Global with AAA and Disney

Posted by: The Global Small Business Blog

John Byrne's last podcast (we're a little late with this news -- sorry) as editor-in-chief at BusinessWeek (Why Dubai Matters). He's off doing his own thing now at C-Change Media.

Congrats to John for finally becoming a true free agent.

One (wo)man's distractions (Ford's) can be another (wo)man's global treasure (Volvo).

Read about how Ford's sale of Volvo to Zhejiang Geely Holding Group Co. could help the Chinese car maker further its global ambitions while allowing Ford to exit a money-losing business that was a distraction from its core operations.

Go here for the article.

Illustration source: Geely Holding Group

Posted by: The Global Small Business Blog

Listen to the podcast: Mansour Javidan, dean of research at the Thunderbird School of Global Management and co-author of the HBR article "Managing Yourself: Making It Overseas." Copyright 2010 Harvard Business School Publishing.

We've written extensively about what Dr. Javidan refers to as developing a "global mindset" (a major prerequisite to moving ahead in our world) and characteristics needed to achieve success as a leader in the global marketplace. So we are glad to see he's "on it."

Find out if you have a global mindset here (immediate download):

Are You Ready? Take The Global IQ Test To Find Out

And remember, even McDonald's was a small shop at one time. Why just click on the 1940 button and you'll see what I mean!

Posted by: The Global Small Business Blog

Here it comes. Brace yourself for a magical and revolutionary product that will change the way we do things on a global basis in the digital media sphere. It's called the iPad.

And we wrote about it first here (2/1/10). And then Mossberg over at the WSJ referred to it the same way here (4/1/10). Remember this piece too? "Who Has the Global Edge On Wireless Reading Devices?"

Looks like we are on to something. Are you ready?

Photo credit: Apple

Posted by: The Global Small Business Blog

Google's search sites in China abruptly stopped working earlier this week, but the explanation for the outage got a little loosey goosey as the day wore on. The Internet technology powerhouse first blamed itself, noting a technical change, but later reversed course and pointed to the heavy hand of China’s “Great Firewall" -- even as service appeared to be back to normal.

Read Google Runs Into China's "Great Firewall" over at the AllThingsD.

What do you think is really going on?

Then, I read the following and find it terribly unsettling yet fascinating at the same time:

Why Foreigners Can't Win in China

And to top that off, which I didn't think was possible, I catch this disturbing piece related not to Google-China relations but to China, the country itself, that makes me want to never ever write about China again:

China Body-Dumping Case Highlights Clash of Values (I'll say)

All of this gives us an idea of the country and the people we are negotiating with.

Posted by: The Global Small Business Blog

On February 9th, I served as a panelist for the San Francisco-based SMB Summit, "How Businesses Can Capitalize on the Rebounding Economy," that was hosted by Verio and Inc. Magazine and for private-company CEOs, business owners, and Inc. 500|5000 alumni. It was a great experience to share insights with other leading experts in the SMB sphere, including:

• Donna Fenn, Moderator, International Author, Contributing Editor/Blogger at Inc. Magazine
• Mitchell Merrifield, Senior Director of Managed Computing Solutions, Verio, Inc.
• Brian Burch, Director of SMB Marketing, Americas Region, Personal Systems Group, Hewlett-Packard Company
• Laurel Delaney, President, GlobeTrade.com
• Kristin Micalizio, V.P. Strategic Initiatives, Office Depot North America
• Alex Freemon, Volunteer, Silicon Valley Chapter, SCORE

Q: Let’s start by addressing the 800-pound gorilla in the room: Is the economy rebounding? Tell us if you’ve seen some glimmers of recovery; how are you reading the tea leaves?

My response: Not really, although I find it hard to imagine it getting any worse. We are at rock bottom so the only way is up. Nothing, other than the “tech” industry, tells me there’s a rebound. What I mean by that is Cisco (Cisco Chairman and CEO John Chambers indicated, “This is one of the most robust positive turnarounds I’ve seen in my career”), Microsoft, IBM, Apple, NetSuite and Google all reported stunning profit results for the last quarter of 2009, which means SMB owners might be getting more tech savvy in preparation for a slow recovery. But let’s face it, money is not just tight. There is no money for growth unless you are running an established business with a wildly successful track record. That’s scary for people who have insanely great ideas and can’t get them funded. The good news for SMB owners who are tinkering with the notion of taking their business global is that our commerce secretary, Gary Locke, pledged $6 billion a year in export financing for USA small businesses through the Export-Import Bank of the United States.

Aside from all this, the only real sign I am seeing with SMB owners related to recovery is ...