Posts Tagged ‘Economic’

Entrepreneurship and MSME – The Engine For Economic Growth and Wealth Creation

With a population of 148 million and the second largest economy in the continent after South Africa, the state of Nigeria's economy is a bundle of extreme contradictions. The US sources 10% of its crude imports from abundant oil fields in the Niger Delta, a region that is also home to one of the largest know natural gas reserves in the world. Despite these natural endowments, Nigeria is crippled with rampant poverty and depressing macroeconomic indicators and human development indices. Unemployment is endemic and more than 54% of its population lives on less than $1 per day. Decades of political turmoil, civilian unrest and large scale government mismanagement are largely to blame for this state of Nigerian affairs.

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Will the Economic Downturn Affect Small Businesses? a New Perspective

The recent sub-prime mortgage crisis and the interlinked subsequent turmoil in the financial markets has generated many concerns in businesses and the general outlook on the economy. The question we want to answer is: will it affect small businesses?

There is no easy answer to this question. But let’s examine the different drivers at play.

On one hand, we have a mortgage market that’s become a lot tighter. This will make it increasingly harder for people to get mortgages. Traditionally, borrowing against your home has been one of the most common ways of funding a new businesses (according to a survey conducted by the Federation of Small Business 25% of start ups use bank loans as their main source of funding, while 49% use bank overdrafts). So these facts would indicate that the credit crunch will have a knock-on effect on small businesses by affecting entrepreneurs’ ability to raise funding.

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Online Marketing to Succed the Economic Downturn

World economy is going through one of its worst crisis in history, with many experts predicting a global economical recession, countries approving multi-billion dollars bailout programs to help their economies to survive and companies having to cut down their costs to avoid bankruptcy.

When companies start to think about cutting down on their expenditures, one of the first things that comes to CEO's and Managing director's minds is to reduce or even cancel their marketing campaigns budgets.

On the other hand CMOs (chief marketing officers) think the opposite; they believe that during an economic down turn is precisely the time when marketing plays an important role. By stopping a marketing campaign you lose contact with your clients and you stop understanding your costumer needs.

An alternative to all these problems is Online Marketing, as the name already suggests Online Marketing is any type of marketing that is done via the Internet; email marketing campaigns, search engine marketing or search engine optimisation campaigns, social media marketing, blog marketing or any other form that you could think of that involves the use of the Internet as a source to promote your brand, products or services.

Why is Online Marketing so important during an economical downturn?

I'm far from an economic expert but there 4 factors that put online marketing ahead of other marketing techniques during a down economy:

1 - Measurement

One of the biggest problems with traditional marketing campaigns is the lack of good measuring methods, with online marketing is a completely different ball game. All you need is a good web analytics package, Google Analytics for instance, to track, measure, document the effect and justify your marketing investments to you boss.

2 - Immediate Effect

It is almost impossible to know how effective a TV commercial or another type offline advertisement is. While online marketing methods have a direct value on sales; especially when we talk about search engine marketing and search engine optimisation.

3 - Good ROI

The success of a marketing campaign is measured by its ROI (return over investment); the higher the better; and there are few things beating online marketing nowadays. For every dollar spent on online marketing, marketers are making more than a dollar through sales or other conversions on their sites.

4 - Small Budgets

With online marketing you can start with a small budget and gradually increase it as you succeed, and believe me many multi-million dollar companies are basing their economic strategies around this simple principle nowadays.

The DMA estimates that expenditures with online marketing will maintain a significant growth in the coming year with more than 50% of U.S marketing dollars directed to Interactive marketing.

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Entrepreneurship ? What?s Behind This Economic Movement? is it an Option for You?

Entrepreneurship is a business trend which for the last 30 years has gone mostly undetected. It is advancing more today than ever before in American history and is not likely to diminish as the country retools for the new economy. It might be helpful to understand something about entrepreneurs if you want to join their ranks.

The <i>New Oxford Dictionary</i> defines <b>entrepreneur</b> as “a person who sets up a business or businesses, taking on greater than normal financial risks in order to do so.” Most business schools are still geared to the BIG corporations, so the typical MBA can’t make a small business work. Fortune Magazine now publishes a small business edition; banks are creating special departments for small business, etc. It might surprise you to learn that women are the fastest-growing segment among entrepreneurs, and Hispanic women are the fastest-growing of all.

When Did This Trend Really Start? One answer might go like this. When the pilgrims landed at Plymouth Rock, they didn’t come ashore looking for jobs. They were America’s first entrepreneurs. They went into the business of raising crops, building houses, hunting and trading with the friendly Indians. They created a new kind of life, which became a new kind of country that has changed our world.

Our Founding Fathers were entrepreneurs who financed the American Revolution to back up their principles expressed in the Declaration of Independence, and the freedoms of the Constitution and Bill of Rights. They never considered Americans would ever be composed of anything but independent business people.

In the early days, there was no assembly line and no automation. Notwithstanding that our forefathers engaged in slavery and a few bigger businesses took root in major cities, the majority of Americans were in business for themselves and our country was dominated by entrepreneurs who tamed the West.

When Did Things Reverse?

Beginning with the Industrial Revolution around the time of the Civil War, we slowly started moving toward being a country of employees. As this trend continued, people moved into large cities to be near the big factories and the companies that serviced these workers. Our school systems started to focus on training people to be employees and our schools began to resemble factories, starting and ending the children’s “shift” with the ringing bell.

However, this trend unexpectedly reversed during our lifetime – a change that has confused economists for decades. Perhaps the major business trend in the US since 1975 has been the steady move of Americans going into business for themselves. Americans have been going into business for themselves at an unprecedented rate since 1975. There was a time in American life when the major corporations ruled. No more – today they employ less than 20% of the work force. By the early 90’s the majority of US exports were produced by firms with fewer than 16 employees! Interesting that the corporate workforce is the most vulnerable in the new economy.

Generally, people become entrepreneurs to pursue a passion in life and to control their own destiny, but a lot of entrepreneurs have joined the movement simply to be free of the confines of being an employee.

Unfortunately, people start a business of their own, often without a workable business plan. Worse, they fail to clarify their purposes. They don’t set adequate clear policy, which kills them as they try to expand. The errors and mistakes cascade from there.

The end result is that new entrepreneurs start out running their business and end up with their business running them. Their lives go out of balance.

There is a common reason for this. Most people who take the leap and go into business for themselves are skilled at only a few of the things a business owner has to know. There is a lot to know to make a business work; skills in leadership, personnel, sales and marketing, finance, quality control and PR are all required in addition to expertise in the company’s products or services. This could also be the primary reason that a high percentage of new businesses go under each year – not “under-financing” as frequently gets the blame. But it is true, when the economy gets tough, as it has recently, the things one doesn’t know really become a threat and funds to make a go of it can become very scarce without careful management of the business.

There are systems that can be learned to deal successfully with the problem areas, and if you use them, you can make entrepreneurship a very rewarding activity. Perhaps the happiest and most successful businesspeople around are those who manage to master each of the skills needed to run a successful business. Accomplishing that, they are free to concentrate on what they like to do most. Sound enticing? For some, I will wager nothing could be better. It is up to you.

Copyright&copy; 2009 Creative Business Strategies, Inc. All Rights Reserved.

David Sanders has experienced, survived and helped others to survive four recessions since 1978. He is considered one of the top experts in Marketing, Productivity and Time Management, Long-term Strategies with Weekly Real Time Planning and Efficient Utilization of Personnel. The CEO of Creative Business Strategies, Inc., a multifaceted corporation, Mr. Sanders still makes time to provide quality seminars to Chambers of Commerce and business develop organizations throughout Southern California. His purpose is to help owners and entrepreneurs win with effective marketing and productivity strategies.


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