What we need right now are more start-ups. This downturn has every business grappling with how to thrive in an ever more global, competitive business arena. If you have a good idea that will get the creaking wheels of our economy oiled and rolling, now is your time to shine.
It’s exciting to see the Grand Valley showing some signs of life. This spring, Western Slope Economic Development agencies interviewed 82 businesses as part of an ongoing program called “Listening to Business.” Results were very positive, with 65 percent of the participating businesses expressing their intention to expand in 2010. These businesses also reported plans to create 681 new jobs and contemplate nearly $1 billion in capital investment. In addition, sales tax receipts, a loose reflection of consumer confidence, are finally flattening out in Grand Junction and rising in Fruita and Palisade. Mesa County Workforce Center reported 18 percent more available positions in July. Good news, right? Well, the counterpoint to reports of business growth is that unemployment remains high. Even with signs of business growth, jobs are hard to come by. This is a “jobless recovery.”
The phrase “jobless recovery” refers to the fact that this downturn has driven businesses to get very efficient and focused on the bottom line. Cash is tight, so they’ve gotten better at generating it. As a result, businesses have found ways to thrive without rehiring all the people they laid off last year.
On July 25, The New York Times reported that the 175 companies in the Standard & Poor’s 500-stock index issuing second-quarter reports had revenue growth of 6.9 percent while increasing profits by a whopping 42.3 percent That means that profits are increasing seven times faster than revenue. For example, Harley-Davidson’s profits have tripled over the last year, despite the fact that the motorcycle industry has been in steady decline for three years. Do you think Harley did this by raising their prices? No, they cut costs. In most cases, businesses have gotten very lean on payroll. And why shouldn’t they? If firms can make great products very efficiently, that’s job security for those who are employed and health and prosperity for the business.
People without jobs need a solution, and today it doesn’t make sense to wait for a solution to come along. With challenges, opportunity is created. Young companies (age five years or younger) accounted for 64 percent of gross U.S. job creation. It’s a good time to start a new business.
Are we seeing more start-ups here in the Grand Valley? The Colorado Secretary of State, Bernie Buescher, reports that since October of 2009 the number of new entities created (forming a legal entity being one of the first steps to start a business) has increased every quarter and by as much at 17 percent over the previous year. We also see this trend at the Business Incubator Center. The Incubator tracks hours spent working one-on-one with clients. In 2010, we are 64 percent busier than we were in 2009. We have spent almost as many hours with clients in the first six months of 2010 as we did in all of 2006. Yes, people in the Grand Valley are starting new businesses.
Start-ups are small, nimble, and focused on filling a need in the market, not just offering a skill set. For example, if you’re a bookkeeper and have been laid off, it’s hard to find a comparable position. Needs have changed, and your former position may no longer be available. The need for high-quality, skilled people remains, but the pain points have shifted. There are always creative ways to use valuable skills. For example, instead of looking for a job as a bookkeeper, you could start a company that provides virtual CFO services, helps companies to go paperless, or keeps accounts receivable within 45 days by maintaining positive relationships with customers. These are the same skills that were valuable in the old economy, just creatively repositioned to serve the needs of a new one.
Several positive trends are generating opportunities in the local market. The travel industry is in recovery. The Grand Junction Visitors and Convention Bureau reports that their visitor numbers are back up to 2007 levels and that lodging tax collection is on the rise. An increase in travel to the Western Slope has spurred growth in many local recreation businesses. Some types that are growing include outerwear, bicycle components, backpacks, and equestrian apparel. Another hot spot is in health care. Our housing is affordable again, making our wonderful weather, plentiful golf courses, and world-class hospitals an attractive retirement choice. Retirees translate into opportunities for health-care innovations like expanded medical offices, niche services, integrative medicine, wellness programs, and new medical devices — along with leisure time options. Lastly, there is a trend to return to traditional sales techniques. Gone are the days when just answering the phone qualified as good customer service. We have returned to a focus on developing a relationship with the customer. Sales staffs are re-learning to ask open-ended questions to engage the customer followed by closed questions to seal the sale. Dale Carnegie did know How to Win Friends and Influence People, and so should you. The opportunities associated with this are in social media (what I lovingly refer to as old-school relationship marketing on steroids). Whether with Facebook, where Grand Junction is trending at No. 2 in the state for usage growth, or Twitter, where Grand Junction is trending at No. 1, business is happening in social media.
With the local economy still in flux, success in this environment takes creativity and a strong connection to new trends. New jobs are being created by small businesses and innovative ideas. The new economy emerging from this downturn will be different from the old, and it’s critical to stay active and connected with current market trends in order to tap into the economic recovery.
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