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You Already Have Subscriptions for Movies and Diapers. Why Not the Couch?

In the six years since Jay Reno started college and finished his masters’ degree, he had moved seven times. Each time, he says, the load felt more punishing. The bed frame seemed to get heavier, and things got damaged. Reno, who grew up in New Hampshire and now lives in New York City, knew there had to be a less headache-inducing way to get stuff from A to B. Or better yet, he thought: What if he didn’t even own stuff in the first place?

Reno figured he surely wasn’t the only Millennial thinking along those lines. So, in 2017, he founded Feather, a New York City-based furniture rental subscription service. Furniture rentals is not a new idea: The 800-pound gorilla in the industry is Rent-a-Center, founded in 1986 with a rent-to-own model that last year was expected to bring in around $1.8 billion in U.S. revenue. Reno says unlike Rent-a-Center, Feather is targeting higher-end customers: people who can afford to buy but just choose not to. Convincing a critical mass of affluent customers to forgo new furnishings in favor of renting used items will be no easy task. Still, Reno has a pitch he’s confident will be persuasive.

“Buying things upfront doesn’t make sense when your space is constantly changing,” says the 31-year-old founder, who graduated from Columbia University in 2012 with a master’s degree in environmental studies. “Owning things ties you to a physical place. It grounds you in a way that you don’t want to be grounded.”

The price of flexibility.

To be sure, swapping the burden of ownership for the flexibility of renting comes at a cost. Feather members pay a monthly $19 subscription fee plus the cost to rent each individual item. For instance, a living room package that includes a sofa, lounge chair, coffee table, and floor lamp will set you back $90 to $167 a month. Members can swap out items for free once a year, depending on their changing needs or tastes. Subsequent swaps will trigger a $99 delivery fee. Non-members can also rent from Feather, though they pay a $99 delivery fee each time and higher per-item fees. A Deco Weave West Elm “Eddy” sofa that runs $39 a month for members costs $134 a month for non-members.

A key part of Feather’s pitch to customers is positioning furniture rental as a more environmentally friendly alternative to buying furniture you may one day discard. Reno suggests the same consumers that, say, buy sustainably manufactured clothing at Everlane, or cleaning products in reusable packaging from Grove Collaborative, will appreciate Feather’s sustainability angle. The company says it cleans and refurbishes all items, save for mattresses, which don’t get reused between renters, to extend their lifespan. Mattresses and furniture that are no longer usable get donated.

Should customers want to buy an item after renting, Feather says it can be purchased for the retail value, minus whatever they already have paid in rental fees. At some rent-to-own companies, like Rent-a-Center, items cost more than they would if customers had purchased them directly from a retailer. Rent-a-Center doesn’t argue with this point. “Yes, there is a premium paid for the flexibility for the service, which includes free set up, delivery, and repairs,” says Michael Landry, vice president of franchise development at Rent-a-Center. Feather charges repair fees, which vary depending on the item, if damages go beyond regular wear and tear.

Millennials are increasingly opting for renting versus buying homes, says Michael Brown, a partner in the retail practice of global strategy and management consulting at A.T. Kearney. Going into the third quarter of last year, only about a third of Americans 35 and younger owned homes, according to a February 2019 report by financial services firm Legal & General. “Renting a home; leasing a car; taking an Uber; renting the runway are all manifestations of this trend,” adds Brown. He notes further that rented furnishings are expected to account for 25 percent of the total U.S. furniture market this year. Overall, U.S. furniture-industry sales in 2019 were expected to increase by 2.8 percent to $114.5 billion from the year before, says Jerry Epperson, managing director at research firm Mann, Armistead, and Epperson.

Investors too are on board with rentals. On February 18, Feather announced a $30 million series B round of funding led by Cobalt Capital, with participation from prior investors including Spark Capital, Kleiner Perkins, Bain Capital Ventures, and others. It had previously raised $16 million from investors. The company says it is using the new funds to expand to additional markets and build its 60-person team.

Feather isn’t the only startup aiming to reimagine the furniture rental industry. Los Angeles-based competitor Fernish also launched in 2017. Last year Fernish raised $30 million from early-stage investor fund Real Estate Technology Ventures, Intuit’s co-founder Scott Cook, and Amazon’s head of global e-commerce and retail operations, Jeff Wilke.

It’s early days for Feather. Its service currently is available only in New York, San Francisco, Los Angeles, and Orange County, California. Reno declined to comment on its number of members or annual revenue, beyond saying the latter is in the “eight digits.”

The true test for Feather–and by extension, Fernish–is whether it can make the product more widely appealing, beyond early-adopter Millennials. Kevin Thau, a general partner at Feather investor Spark Capital, is convinced it can. “Today’s consumers demand fast and reliable products and services that make their lives easier,” he says. “Feather delivers on just this by allowing consumers to easily rent furniture and skip the enormous hassle of purchasing and inevitably moving their furniture from one place to the next.”

Reno says even legacy retailers are starting to respond to the idea that ownership is less popular among certain customers. Feather offers Williams-Sonoma brand West Elm and Joy Bird furniture in its inventory, along with mattress firm Leesa. Crate and Barrel partnered with Fernish to offer its collections to renters in 2018. And in a related sign of the times, in November 2019, Nordstrom announced it would include exclusive products available for both purchase and rental through Rent the Runway. 

“We’re already starting to see consumers shift away from ownership as a default,” Reno adds. “And we believe this behavior is only going to grow.”

By Tatyana Bellamy-WalkerEditorial intern, Inc.com

Source: You Already Have Subscriptions for Movies and Diapers. Why Not the Couch?

Jay Reno is the CEO and founder of Feather. Feather is a furniture subscription service. They were in the Summer 2017 batch of YC. https://twitter.com/jayjreno You can check out their furniture at LiveFeather.com and if you live in LA, SF, or New York you can try out the service. https://www.livefeather.com/ The YC podcast is hosted by Craig Cannon. https://www.livefeather.com/ Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year. Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/

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No Customers, Closed Stores: Chinese Entrepreneurs Brace For The Worst Amid Coronavirus Outbreak

Zhou Yuxiang was not in the mood for festivities during China’s Lunar New Year holiday this year. The 30-year-old CEO of Shanghai-based software startup Black Lake Technologies had to figure out how to manage his company amid the country’s deadly coronavirus outbreak. Working from home to comply with local quarantine rules has lowered productivity, while expenses remained high as he still needs to pay rent even when no one is using the office.

What’s more, Zhou says, clients are slower to take on new contracts as factories remain shut and production is delayed, hurting his otherwise fast growth.

“This epidemic caused production suspension for a considerable number of factory clients,” he says, who counts 300 factory owners as customers of his cloud-based management software. “Unpredictability on when factories could resume production has increased uncertainty for our first quarter growth.”

As the deadly virus, temporarily called 2019-nCoV, shows no sign of slowing, China’s vast business scene is taking a hit. While some companies, including Zhou’s, hope to recoup any losses before the year’s end, others are suffering a much more devastating blow.

This is because the epidemic’s economic damage is far and wide. It is believed to be more contagious than the 2003 Severe Acute Respiratory Syndrome (SARS) epidemic, causing the Chinese government to impose nationwide mall closures, movie cancellations and factory shutdowns to prevent the disease’s further spread. As manufacturing and business activities cease, first quarter GDP growth will plummet to 3.8%—which equals to $62 billion in lost growth—and drag full-year GDP growth below 6% to 5.4%, according to UBS economist Wang Tao.

Sectors that are hardest hit include catering, entertainment, hospitality, retail and transportation. These businesses tend to have heavy inventory or a lot of expenses, but they can’t generate any meaningful revenue when people stay indoors.

Jia Guolong, founder of popular restaurant chain Xi Bei, told local media this week that his company only had enough cash for the next three months. He still needs to pay rent and salary to more than 20,000 employees, even when his restaurants are largely empty. To preserve cash, Hong Kong’s flag carrier, Cathay Pacific has asked its 27,000 employees to take three weeks of unpaid leave, warning that the condition is as grave as the 2009 global financial crisis. And fast-food operator Yum China is expecting negative impact on 2020 full-year sales and profit, after temporarily shutting down 30% of its stores in China.

While these larger businesses may eventually have the resources to weather through, smaller startups could experience a life-and-death moment. Zhang Yi, founder of Guangzhou-based consultancy iiMedia Research, says he won’t be surprised if a wave of bankruptcies occur. And Wang Ran, founder of Beijing-based investment firm CEC Capital, urged startups to do whatever they can to survive.

“Downsize if you need to, relocate if you need to and lay off people if you need to,” Wang wrote in a recent blog post. “Only those who lived through this can see spring, and have a future.”

Beijing has put out rescue measures. The country’s central bank, the People’s Bank of China, announced on February 2 that it would pump $174 billion worth of liquidity into the markets to help cushion the impact. Local governments have called for rent deductions and more flexible salary arrangements, with the Shanghai municipal government promising tax and insurance refunds to employers who don’t engage in layoffs.

But analysts say business survival may ultimately depend on whether the virus can be contained. Since originating in the central Chinese city of Wuhan in December, it has spread across the country, infecting more than 28,000 people and killing over 500. There are now coronavirus cases around the world, including Japan, Thailand, Germany, the United States and the United Arab Emirates. The World Health Organization declared the outbreak a global health emergency and dozens of nations, including Italy, Singapore and the U.S., have placed travel restrictions from China.

“The longer this drags on, the bigger the damage,” iiMedia Research’s Zhang says. “If it lasts for another month, then it would be unbearable for any business.”

Startups are doing what they can to minimize damage. Black Lake’s Zhou is offering discounted services, especially to clients who are based in the most affected areas. Zhou Wenyu (not related to Zhou Yuxiang), founder of Shaoxing-based software startup Youshupai, is slowing down marketing activities and transferring its first quarter sales goal to the second quarter. And Joanne Tang, founder of travel and marketing agency Infinite Luxury, says she is diversifying to other Asian markets while reminding overseas-based clients not to reduce efforts in China.

“For sure, we are in a challenging time,” Tang says. “We have to monitor how it goes, but we won’t be standing still and just wait until this is over.”

I am a Beijing-based writer covering China’s technology sector. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. Prior to Beijing, I spent six months as an intern at TIME magazine’s Hong Kong office. I am a graduate of the Medill School of Journalism, Northwestern University. Email: ywywyuewang@gmail.com Twitter: @yueyueyuewang

Source: No Customers, Closed Stores: Chinese Entrepreneurs Brace For The Worst Amid Coronavirus Outbreak

CNBC’s Eunice Yoon reports on how the coronavirus outbreak is expected to take a serious toll on China’s economy. Expect supply disruptions as China takes measures to contain an ongoing coronavirus outbreak, says REYL Singapore’s Daryl Liew. “The sharp action taken by the Chinese government to basically delay workers going back to work is definitely going to cause some supply disruptions,” Liew, who is chief investment officer at REYL Singapore, told CNBC’s “Street Signs” on Thursday. With the virus infecting at least 7,700 and killing 170 in China, authorities have taken measures to curb the disease’s spread. At least three provinces have declared that businesses, other than some essential industries, are barred from resuming work before Feb. 10. In Hubei province, where the majority of cases have been found, resumption of local business has been delayed till at least Feb. 14. A “big question mark” remains over how long the disruptions could last, Liew said, as it depends on whether the situation can be contained. That comes as manufacturing numbers were showing “some normalization,” he added. “It’s a bit of a lagging indicator but the December ISM numbers have all been broadly positive, especially for Asian economies … which suggest essentially that global trade is normalizing. It’s not bouncing back significantly but it is rebounding,” Liew said, adding that that has translated to better manufacturing numbers. “The current virus … and the extended shutdown in China will definitely put a crimp to that,” Liew said. Potential impact on US businesses The outbreak has sent tremors across markets in Asia and beyond in recent days, as investor concerns about the potential economic impact grow. “We’re concerned that there could start to be … some overall impact on the Chinese economy which could lend itself, from a sentiment perspective, to greater concerns … for the global economy,” Shannon Saccocia, chief investment officer at Boston Private, told CNBC on Thursday. That could spillover into the performance of U.S. businesses at a time when the “strain of lower production” is being felt stateside, Saccocia said. “If we start to see that upended by the fact that factories aren’t opening and … we’re not able to get the components that we need from the Chinese economy, you know, that could … certainly slow any sort of manufacturing reacceleration that we were hoping for in the first two quarters of 2020,” she said. The Chinese city of Wuhan, the capital of Hubei province, is the epicenter of the outbreak, and authorities have placed multiple cities in the province under partial or complete lockdown. Wuhan and the surrounding region of Hefei and Jiangsu are major manufacturing hubs that work with American firms. But they have also been shut down due to the virus outbreak. “As an investor, you need to understand … where the supply chain starts and ends and factor in to your expectations … for those companies,” Saccocia said, though she acknowledged that it’s “a little early” to “paint the picture that half of the year is going to be meaningfully lower from a growth standpoint due to this virus.” For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://www.cnbc.com/pro/?__source=yo… » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC #CNBC #CNBC TV

Small Factories Embrace Automation Because They Can’t Find Enough People

Robotic arms on display.

If you look up at the night sky and happen upon some little lights on the move it might be a shooting star. Likely it is not a UFO.

The better bet, of course, is that the lights belong to an airplane. And the odds are very high they come from Astronics Luminescent Systems Inc (LSI).

These ingeniously designed, extra-durable LED exterior lights are made at Astronics LSI’s flagship factory in East Aurora, New York, a suburb of Buffalo. The facility, utterly nondescript from the outside, though a sprawling, bustling workshop inside, employs 300 mostly blue-collar workers.

With its motto of “innovation at 30,000 feet,” Astronics LSI is well-known in the industry for aircraft lighting. It’s also a major supplier of cockpit instrument panels. The company’s hundreds of products are subjected to rigorous quality control measures as dictated by the Federal Aviation Administration. Cockpit lights need to be bright, but not too bright. And they can’t ever suddenly go out.

Image result for small industry big size gif advertisementsDemand is usually sky high with new jet fleets being rolled out regularly. Astronics products are custom-crafted. They are tested and re-tested. Nothing is rushed.

Still, the company is eager to ramp up production. And they would, too. If only they could hire more people.

“It’s been a continual challenge for us,” Astronics CFO David Burney said. “We can’t find enough qualified workers.”

The company needs machinists and engineers and assemblers – careful, not easily distracted people who like working with their hands.

Astronics is not alone.

The National Association of Manufacturers has sounded an alarm, estimating some 2.4 million manufacturing jobs could go unfilled by 2028 due to labor shortages.

Somewhere along the line, over the past several generations, high school shop courses fell out of favor as communities steered their youths toward college degrees tied to white-collar work. New forces are at now reshaping the labor market.

Automation, as well as AI technology that takes robotics closer to sci-fi levels, has and will continue to reconfigure work as humans have known it. At risk, it seems, are people who weld, fabricate, mill, join, lathe, wire, cut, hoist, assemble, package and load stuff.

“AI could affect work in virtually every occupational group,” said the Brookings Institute in a new report. And while manufacturing and production workers will be among the most affected, white-collar workers are seen as equally vulnerable.

Most big companies, such as those in the automotive industry, already have become mostly automated; smaller companies, not so much.

Robotic arms have become nimbler, safer and less expensive. It has never made more sense for so-called “SMEs” (small and medium-sized enterprises) to automate.

Image result for small industry big size gif advertisements

Advanced manufacturing has a chance to transform smaller manufacturers like Astronics, and hundreds of others like them in the Western New York region.

Written off by some as a rust-belt relic, Buffalo tried to reinvent itself during the 1980s and ‘90s as more of a white-collar hub. But its blue-collar roots run deep, going back to the early part of the nineteenth century.

The first waves of Irish immigrants, many of whom helped build the Erie Canal, found work unloading grain shipments from eastbound lake freighters hauling barley, wheat and rye across Lake Michigan, by way of the Detroit River, to Buffalo. In the latter part of the 19th century, that task was automated. Grain elevators (buckets fastened to steam-powered conveyor belts) may have displaced some Irishmen (who became “scoopers,” going down into hulls to shovel the corner piles that the buckets couldn’t snag) and, as more Irish (and German and Polish and Jewish and Italian and black Southerners) poured into Buffalo, they found abundant employment. Bethlehem Steel and Curtiss-Wright and GM and Ford plants at one time all ranked among the most productive manufacturing sites on the planet.

By the 1970s, most of the large manufacturers were gone, leaving behind empty, too-massive-to-knock down facilities most of which still stand today like “the ruins of a manufacturing empire,” as one local business leader has said.

In 2014, New York State Governor Andrew Cuomo, through his Buffalo Billion initiative, opened Buffalo Manufacturing Works. It runs an ambitious nonprofit program to help revitalize the area’s manufacturing base through technology, including robotics and also additive manufacturing, or 3-D printing.

Related imageBuffalo Manufacturing Works (and don’t ever call them “BMW” if only because the German multinational has that trademarked) was born of a vision by state and local leaders to reinvigorate the city’s manufacturing base. Because Buffalo had few, if any, automation consultants and no real robotics industry of which to speak, the state partnered with Columbus, Ohio-based technology innovator EWI.

For more than three decades, EWI has been providing advanced manufacturing support to companies across the rust belt and throughout the country. Expanding on what EWI has done in Ohio, Buffalo Manufacturing Works serves as a central resource for Western New York manufacturers as they tip-toe toward innovation, including automation.

The Buffalo area is still home to more than a dozen large manufacturers, including Moog, Sumitomo Rubber, Fisher-Price/Mattel and Dresser-Rand. Two GM plants still make engines here. And there is a Ford stamping plant.

Tesla’s controversial factory in South Buffalo, originally SolarCity, employs about 300 people making energy storage products for electric cars. Panasonic Corp, which makes solar panels, has about 400 employees. Whether the Tesla-Panasonic partnership creates hundreds more jobs remains to be seen. (Based on the amount of subsidies provided, New York State believes it will).

Despite the dramatic reduction of large manufacturers over the decades, there are roughly 1,600 small- and medium-sized factories based in Western New York (a region also often dubbed Buffalo/Niagara) still making stuff – aircraft lights and radio antennas and countless other items. Mostly we are talking about small parts and components of other products. To stay competitive, these small companies, many of them run like family businesses, will need to invest in the future.

“Only about 20% of the small factories in the Buffalo area have some form of automation,” said Mike Garman, Senior Engineer-Automation, Buffalo Manufacturing Works. “The rest are just starting out down this road. A lot of these companies know they need to automate but putting in a robotic arm? That’s overwhelming to them – they don’t know where to begin.”

If Buffalo is ever to regain past manufacturing glory, the companies calling it home might have no choice but to automate.

“We project more than 20,000 advanced manufacturing job openings in Western New York in the next 10 years,” said Stephen Tucker, President and CEO of the Northland Workforce Training Center, another key player in the region’s advanced manufacturing initiative. The openings owe to an aging workforce and pending retirements, Tucker added.

“[The training center] is working to prepare local residents with 21st century technical skills necessary to fill those jobs,” he said.

Related imageAbout a 15-minute drive north from Astronics’ East Aurora factory is one of Buffalo’s best-known suburbs, Orchard Park, home of the NFL’s Bills.

In a bland corporate complex, not that much more than a Josh Allen deep ball away from New Era Field, is a company called STI-CO. They make mobile radio antenna systems. STI-CO’s customers include law enforcement agencies and the military which need customized covert equipment. The U.S. Department of Defense uses the company’s products to outfit low-profile overseas operations and in natural disasters.

Additionally, STI-CO engineers antenna systems for freight and passenger railroads that communicate critical Positive Train Control data such as how fast a train is moving and if it needs to be remotely controlled to slow down.

“We recognize that we need to automate and have allocated the resources to do it,” said CEO Kyle Swiat, whose late father, Robert Kaiser, a machinist, founded the company in 1967. “But we are involving all of our people in the conversation.”

They’ve added CNC machines and a 3-D printer to speed up processes.

“Our employees are excited about the technologies,” she said. “They want to see the company invest in future growth.”

Today, STI-CO produces hundreds of products and is keen to stay competitive in a global market. That means exploring alternatives, including, eventually, robotics.

She also confirmed the challenge of finding qualified, reliable workers and sees automation as inevitable and a win for her 45 employees.

“This is a family,” she said. “Even if we could automate the whole operation we wouldn’t ever do that because we believe that people still make the difference.”

One of the worst jobs at the STI-CO plant had been the dreaded taping and labeling detail. Each set of antennas come with sets of color-coded wires (like when you hook up a stereo). STI-CO’s process for packaging and marking the wires not only was tedious but woefully inefficient i.e. done in an outdated manner the way they’ve always done it – by hand.

So in something of a baby step into the future, STI-CO, about ten months ago, invested in a computer-enabled system. While not a robot, the creatively engineered set-up was a modern machine that took on the bundling and labeling tasks previously done by humans, freeing up those workers to focus more on quality control.

“When a company looks to automate, the first project should be an easy win,” Garman said.

Simply automating for the sake of automating, without fully thinking it through, creates more headaches, not less, he warns; a robot deployed without a clear problem to solve is just “a hammer in search of nail,” Garman explains. “We always say, ‘start slow, start small and keep it simple’ and then move from there to something more ambitious.”

As far as its first foray into actual robots, STI-CO is still coming up the curve with help from Garman and the team at Buffalo Manufacturing Works, as well as from a host of robotics industry people: advisory professionals; robotic arm distributors; systems integrators and consultants. These firms form a village of advanced manufacturing enablers supporting smaller factories in their efforts to automate more activities.

In the next installment, we’ll take a deeper dive into this robotics ecosystem and the work they are doing to reboot the Buffalo area.

(Part two of this three-part series will run tomorrow, Wednesday, Nov. 27.)

Follow me on Twitter or LinkedIn.

I’ve covered Wall Street for nearly 25 years, focused mainly on asset management, working for publications such as ABCNews.com, Trader Monthly and Institutional Investor. Lately, writing as a freelancer, I’ve been focusing on machine learning and automation. I am also the author of three nonfiction books, including “The Day Donny Herbert Woke Up,” currently being adapted into a motion picture. I do NOT have a podcast.

Source: Small Factories Embrace Automation – Because They Can’t Find Enough People

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How Chatbots, Apps And AI Will Transform The Travel Industry

The travel industry has constantly evolved, leading changes in technology, society and consumer tastes. Travel was the domain of the wealthy until technology and leading travel companies rapidly changed this in the latter part of the 20th century. The United Nations World Tourism Organisation estimates that there were 25 million tourist arrivals in 1950, today we see 1.4 billion.

Travellers of the 21st century are tech savvy consumers. They’re not wandering into their local high street travel agency to seek out the best deals for their next holiday. They are getting both advice and inspiration online, as well as of course booking their perfect travel experience online. Social media platforms play a central role in this, showing organic posts and paid for promotions enticing people to book that next trip to their dream destination.

Crucially though travellers continue to seek advice from travel professionals for expert advice. While there are many ways in which travel companies can meet these consumer needs, AI driven chatbots are playing an important role in an age of instant access.

AI-powered chatbots can make or break the difference between a good and bad customer journey on your website. Many chatbots are rudimentary, but the companies at the leading edge are pioneering the way forward with high levels of customer satisfaction. Their use is only expected to increase in the coming years too, with Sales Force’s research State of Service projecting that their use in the travel industry will nearly double by mid-2020 to 29%.

While chatbots first came about in the 1960s, so might not be considered cutting edge innovation, it is the machine learning innovation behind them that is constantly evolving and critical to ensuring people receive the efficient advice and level of customer service they are expecting. Recent improvements in AI are making it such that companies who invest significantly in this and leverage their data correctly, can provide meaningful customer experiences while managing costs more effectively.

We are operating in a world where people expect robust answers and they expect them fast; the advent of mobile phones paved the way for this and apps such as WhatsApp and WeChat ensured this. As such, a business’ technological capabilities are having to constantly evolve to deliver: AI driven chatbots are just one example of the way to meet these needs.

As we increasingly carry out our lives online, digital and mobile is changing the face of the high street. In Britain during the first six months of 2019 16 stores closed every day, resulting in a net decline of 1,234 shops. The travel industry is not immune to these shifts in consumer habits as highlighted by the recent collapse of Thomas Cook, which has impacted the livelihoods of thousands.

This recent failure is reflective of a wider trend which has seen the number of travel agents in the U.S. decrease by 45,200 between 2000 and 2018. Digital transformation is constant, and businesses need to be awake to the changing impact on their employees. It is predicted that by 2023 companies will have to retrain or replace a quarter of their staff in response to technological change.

Training programms and a focus on upskilling are essential cornerstones of a successful 21st century business. To stay at the forefront of technological advances and to support day to day operations e-commerce businesses require hundreds of employees and we need to make sure they are equipped with the knowledge to succeed.

Technology puts the world at your fingertips and for travel–the largest e-commerce sector in the world–that saying is quite literal. People tap into their phones, launch apps and manage their lives. In Q2 2019, mobile broke records with consumers downloading more apps and spending more money in app stores than ever before.

Apps streamline customers’ journeys, increase customer loyalty and create regular touchpoints with the customer. 80% of us use our mobile phones to search for information online, 27% then go onto download an app related to our searches–a business without an accessible and appealing app will be cast aside for their competition. According to the latest research on the travel industry by Euromonitor International, online travel sales will account for the largest share of travel bookings by 2024 and a quarter of all bookings will be made via mobile.

Travelling habits have changed significantly over the last 80 years and they will change again over the next 80. It is anticipating how it will change and how consumers will travel in the future that is essential for a business to not just survive but establish itself as a sector leader.

Dana Dunne is the Chief Executive Officer of eDreams ODIGEO, one of Europe’s largest online travel companies serving more than 18.5 million customers every year. eDreams ODIGEO puts technology to work on behalf of consumers so travelers can get the best, most convenient deals in travel services including flights, hotels, car rental, and insurance. Dana has an MBA from Wharton Business School and a BA in economics from Wesleyan University. A keen cyclist, Dana splits his time between London and Barcelona and has dual citizenship (American and British).

Source: How Chatbots, Apps And AI Will Transform The Travel Industry

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HiJiffy’s webinar about “How Chatbots are changing the Travel Industry” discusses really relevant themes, such as messaging apps usage or what, in our opinion, are the top chatbots in the travel industry.

60+ Small Business Statistics That You Can’t Afford to Ignore & Top 10 Website Hosting

Small and medium-sized enterprises (SMEs) account for 99.9% of the business population in the U.K. This totals around 5.9 million businesses.

Transforming your dream into reality by starting up a new small business can be both exciting and challenging. However, it’s entirely possible to do but requires some knowledge about what and how small businesses succeed.

Familiarising yourself with recent trends is a great starting point. We’ve put together these small business statistics, including the latest trends in 2019 just for you.

Facts & Statistics

  • Small and medium enterprises represent more than 90% of the business population
  • It is estimated that there are up to 445 million micro and small and medium enterprises in emerging markets around the world
  • 99% of all businesses in the European Union are classified as SMEs
  • 96.4% of manufacturing exporters in the US are SMEs
  • There are currently 30.2 million small businesses in the U.S.
  • 75.3% of private-sector employers are micro-businesses or those with less than ten employees
  • 69% of American entrepreneurs start their businesses at home, and 59% of businesses continue to be home-based even after three years of operation
  • The fastest-growing small business industries in 2018 (with the most number of startups) were business services and food/restaurant tied at 11%
  • The majority of small business owners are over the age of 50, a fourth is in the 40-49 age range, and the rest are between 18 to 39 years old

U.K. Small Businesses

  • There were 5.8 million small businesses at the start of 2019
  • SMEs account for 60% of the employment and around half of turnover in the UK private sector
  • In 2019, there were estimated to be 5.9 million UK private sector businesses
  • 1.4 million of these had employees and 4.5 million had no employees
  • Wholesale and Retail Trade and Repair accounted for 14% of all SME employment
  • London (1.1 million) and the South East (940,000) had the most private sector businesses, accounting for 35% of the UK business population
  • Nearly 1/5 of all SMEs were operating in Construction
  • Between 2018 and 2019, the total business population grew by 3.5%
  • Turnover in 2018 was estimated at £2.2 trillion for SMEs
  • It takes roughly 13 days to start a small business in UK and Ireland

U.S. Small Businesses

  • On average, it takes 6 days to start a small business in the U.S.
  • 56% of small businesses think finding great talent is their biggest challenge
  • 37% of business owners offer higher salaries to make their business more appealing
  • 26% of people say their biggest motivation to start a small business is to be their own boss
  • In 2018, there was a 34% increase in health, beauty, and fitness industries
  • 73% of small business owners are male
  • Only 26% of small business owners have a college degree

Small Business Growth

  • Each month an average of 543,000 new businesses are started
  • As of 2018, 99.9% of US businesses are small businesses
  • Small businesses employ more than 47.5% of the private workforce in the US
  • Businesses with less than ten employees are the most common, accounting for 75.3% of all private-sector employers
  • 50% of small businesses survive five years or more
  • The Small Business Association has stated that only 30% of newly founded businesses are likely to fail within the first two years
  • 66% of small businesses will survive throughout the first ten years
  • Every year 1 in 12 businesses closes
  • 4 out of 100 businesses survive past the 10-year mark
  • 82% of companies fail because of cash flow problems
  • 50% of small businesses are home-based
  • 60.1% of firms are without paid employees
  • 81% of small business owners work nights
  • 70% of small business owners said they work more than 40 hours a week with 19% working over 60 hours
  • 86.3% of small business owners take less than $100,000 a year
  • Technology, health, and energy are the most popular industries to start a small business in
  • Real estate, retail, and hospitality are also among the industries that are set to have the most substantial growth in jobs in the future

Small Business Financials

  • In 2018, the average SBA loan was $417,314
  • 26.9% of small business loans get approved
  • 12% of employer firms and one-third of non-employer firms use no startup capital whatsoever.
  • The average amount of small business starting capital is $80,000 a year
  • 1/3 of small businesses are founded with up to $5,000 of startup capital

Women-owned Small Businesses

  • In the U.S., 12.3 million businesses are owned by women
  • In 2018, 207,900 of women-led businesses (1.7%) generated more than $1 million
  • 17% of all women-led businesses are Latinas
  • 48% of women business owners are between the 45-65 age range
  • 31% are age 25-44

Small Business Marketing

  • 70-80% of people research a small business before visiting or making a purchase from them
  • 64% of small businesses have a website
  • 61% of small businesses invest in social media marketing
  • 39% of small businesses use email marketing
  • Nearly 50% of small businesses spend $10,000 or less on digital marketing each year
  • 80% of small businesses don’t use content marketing
  • 89% of small business owners believe that using SEO helps drive business
  • 92% of small business owners think that having a website is the most effective digital marketing strategy
  • 10% of small businesses engage in AR and VR technology for digital marketing

References

https://www.worldbank.org/en/topic/smefinance

https://smallbusiness.yahoo.com/advisor/16-surprising-small-business-statistics-infographic-190434232.html

https://ec.europa.eu/growth/smes/business-friendly-environment/sme-definition_en

https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf

https://sbecouncil.org/about-us/facts-and-data/

https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf

https://smallbiztrends.com/2013/07/home-based-businesses-startup.html

https://www.guidantfinancial.com/small-business-trends/

https://www.bluecorona.com/blog/29-small-business-digital-marketing-statistics

https://www.valuepenguin.com/average-small-business-loan-amount

https://www.biz2credit.com/small-business-lending-index/november-2018

https://www.wbenc.org/blog-posts/2018/10/10/behind-the-numbers-the-state-of-women-owned-businesses-in-2018

https://about.americanexpress.com/files/doc_library/file/2018-state-of-women-owned-businesses-report.pdf

https://www.merchantsavvy.co.uk/uk-sme-data-stats-charts/

By: Anna Foster

Source: 60+ Small Business Statistics (That you Can’t Afford to Ignore) – Top 10 Website Hosting

44.5K subscribers
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5 Ways You Can Recession-Proof Your Business That Go Beyond Simply Saving Money

The economic outlook at any point in time can cause confusion. Is the market bullish or bearish? What if Wall Street is happy but wages aren’t keeping pace and thus customers are tightening their belts?

One thing we can say for sure is that traditional markers of economic growth and stability show the U.S. economy is improving. Hiring is up, and unemployment is down. California just posted it’s lowest unemployment numbers in more than four decades. However, there are always doubts about the economy when debt is high and many people have little extra spending money.

What are some unconventional but beneficial moves for small businesses to make in this economic climate, then? Here are a few options.

Invest in upgrades now, not later.

Typical posts about recession-proofing your business would have you save up and hunker down for the inevitable economic downturn. While saving up is always a good thing, sometimes the best strategy to meet economic uncertainty is to grow before it arrives. Growth requires facilities sufficient to sustain increased demand. Consequently, now’s a great time for your business to invest in better equipment and facility upgrades.

Make sure you line up funding before you begin a facility overhaul or equipment buying spree, however. Start shopping around now for the best funding options. Explore bank loans, lines of credit, or other kinds of financing from different sources so you can find the most competitive terms available to you.

The types of financing available to small-business owners are increasing these days. Financial and risk-management technologies are making the extension of business credit in the form of loans or revolving lines of credit more attractive for lenders. That means you’ll have an easier time securing financing now than, say, later on, if the economy takes a turn for the worse.

Add mobile payment options.

How easy do you make it for your customers to make purchases? According to a recent Bank of America report, 46 percent of small businesses were equipped to take digital payments in 2018, a substantial increase from 36 percent in 2017.

Expanding your customer base and making it easier for those customers to make purchases is one of the soundest investments you can make in your business. Leaning into digital payment technology isn’t something that’s usually at the top of the list for most companies when times are lean. With a healthier economy right now, make sure you’re keeping up with the technological times and helping your mobile customers give you their business.

Attract top talent.

If you want your business to dominate your industry or even just a slice of it, you’ll need the best possible people on your team. Figure out ways to court the best workers in their fields for open positions.

A key strategy for accomplishing this goal is to examine what your industry leaders do. What kind of compensation packages are they offering? Where do they recruit? Do they offer college internships, and are they paid or unpaid? Adopt and adapt their tactics to suit your own business.

Plan to expand.

The crash of 2008 put a lot of business plans on hold. While the economy has certainly improved, that sense of pressure and crisis is hard to shake off. And many companies have shied away from significant investments.

Therefore, an unconventional tactic may be to dust off those expansion plans. Be careful, though. Evaluate your revenue and cash-flow projections to make sure your future earnings warrant such a move. If so, then proceed with those plans if the expansion still makes sense for your business. However, remember that goals you set years ago may not necessarily fit your business today.

Attack your debt, and build up reserves.

Pay down both personal and business debt where you can. High levels of credit card debt can rack up thousands, especially with interest rates in the double digits. If you have college student loans, pay those down as well.

Also, aggressively add more to personal savings and build up cash reserves for your business. Extra cash on hand will come in handy during a downturn.

Get a professional opinion and advice about other smart money moves. Hiring a personal or business financial planner is a savvy investment. In addition, expand your own knowledge in other ways. Read books on the economy and financial planning, take a course at your local college or online, and spend more time keeping up with financial developments through news sites and financial blogs.

Finally, set realistic yet challenging financial goals, both for yourself and your business. Goals that feel like a bit of a stretch are usually the ones that keep us fired up and motivated. Write down your goals and then figure out how you can achieve them within a realistic time frame.

By John Boitnott Journalist and digital consultant

Source: 5 Ways You Can Recession-Proof Your Business That Go Beyond Simply Saving Money | Inc.com

2.14M subscribers
How Do You Get Started In Sales And Business? With The Right Mindset. Click Here To Get Dan’s Book, F.U. Money For Free: http://improvesalesandbusiness.danlok… How do you improve your sales process and increase business? In this video, Dan Lok reveals some of the most important methods to making more money, getting more leads, and scaling your business. Watch this video now to discover how to improve your sales process and increase business. 👇 SUBSCRIBE TO DAN’S YOUTUBE CHANNEL NOW 👇 https://www.youtube.com/danlok?sub_co… Check out these Top Trending Playlists – 1.) Boss In The Bentley: https://www.youtube.com/playlist?list… 2.) Sales Tips That Get People To Buy – https://www.youtube.com/watch?v=E6Csz… 3.) Dan Lok’s Best Secrets – https://www.youtube.com/watch?v=FZNmF… Dan Lok is a Chinese-Canadian business magnate and global educator. Mr. Lok is leading a global education movement spanning across 120+ countries where Mr. Lok has taught millions of men and women to develop high income skills, unlock true financial confidence and master their financial destinies. Beyond his success in business, Mr. Lok was also a two times TEDx opening speaker. An international best-selling author of over a dozen books. And the host of The Dan Lok Show – a series featuring billionaire tycoons and millionaire entrepreneurs. Today, Mr. Lok continues to be featured in hundreds of media channels and publications every year and is widely seen as one of the top business leaders by millions around the world. ★☆★ CONNECT WITH DAN ON SOCIAL MEDIA ★☆★ Podcast: http://thedanlokshow.danlok.link Instagram: http://instagram.danlok.link YouTube: http://youtube.danlok.link Linkedin: http://mylinkedin.danlok.link #DanLok #SalesProcess #IncreaseBusiness This video is about How To Improve Your Sales Process And Increase Business https://youtu.be/dyihEhXje78 https://youtu.be/dyihEhXje78

How Your Small Business Can Maximize Profit & Minimize Loss With a Financial Plan

As one of the most essential aspects of a business proposal, the financial plan utilizes current financial data to project long-term profits and losses for your company. As a business owner, having a strong financial plan helps you identify potential issues and discrepancies while it’s still early enough to make changes. Having a good financial plan handy also improves your odds of securing funding from banks and other investors by showing you’ve done your due diligence.

Still, first-time entrepreneurs often struggle to create these all-important documents.

Below are five components every financial plan should have, along with suggestions for collecting the necessary data to plan your business’ future.

1. Income statements

Income statements reveal revenue, expenses and profits over a given period of time. Start by making a list of all the costs and expenses associated with running your business. This may include raw materials, suppliers, employee salaries and rent costs. Then record your revenue, which is the money you receive in exchange for providing goods and services. By subtracting your expenses from total revenue, you can determine whether your company can expect to make a profit or suffer a loss.

This information is crucial not only for planning purposes, but it can also help draw potential investors to your business.

While income statements for existing businesses convey data from the past one or two years, startups must instead forecast this information based on their research. When drafting your company’s first income statements, you may need to project profits and losses using information from similar businesses in the area. The goal is to determine if your company can support itself moving forward and make budgetary changes as needed.

2. Cash flow

Cash flow projections estimate the amount of money that will be entering and exiting the business on a regular basis. Determining net cash flow requires simply subtracting cash outflow from cash inflow, which reveals only those funds that are actually available at a given time.

Just as with your income statement projections, you’ll have to create a plan of how you expect your cash to flow based on rational observations, predictions and your own research. Again, while it seems frustrating, compiling a schedule of when cash comes in and out can give you (and investors) insight into how much cash you’ll actually have available to operate your business.

By keeping accurate cash flow statements as your business matures, you can identify problem areas before they grow too large to contain. For instance, if your projections suggest you need more immediate cash, you can try strategies to help bring it in, such as turning over inventory more quickly or reducing the length of your billing cycle. However you use it, a cash flow’s primary functions are to assess your company’s financial health and help you make business-development decisions moving forward.

Another thing to keep in mind: When calculating your cash flow projection, you won’t be able to use any revenue amounts from unpaid invoices. The reason? That revenue hasn’t been collected yet and thus isn’t available to go in or out. Yes, you may be able to declare the money from unpaid invoices in your revenue projections, but not as cash on hand.

3. Balance sheet

balance sheet provides a snapshot of a company’s assetsliabilities and equity at a given time. As its name implies, a balance is struck between a company’s assets, which equal its liability added to the value of its equity.

First, take time to list all assets, including accounts receivable, savings, inventory and equipment. Next, you should detail all liabilities, such as accounts payable, loan payments and credit card balances. Lastly, you can add up the company’s equity, which may take the form of owner equity, investor shares and earnings from stocks. When you’re finished, check to make sure that the total value of assets equals that of your liabilities plus your equity.

As you may expect, your balance sheet can have a significant effect on your business’ ability to secure the funding it needs to get off the ground. Learn more about how to create a detailed balance sheet to track your startup’s liabilities and equity.

4. Break-even analysis

It’s no secret that startups rarely turn a profit at the onset. If and when your business does cross the threshold from red to black, it will have crossed the break-even point. The break-even point occurs when the expenses of running your business equal the revenue from your products and services. To increase your odds of reaching that crucial turning point, take the time to create a break-even analysis as part of your financial plan.

Along with your company’s fixed and variable costs, the document should include projected prices and account for the value of inflation. Not only does a break-even analysis show potential investors that your company has the potential to succeed, but it also enables you to make better decisions regarding resource allocation. If your break-even point is too high, you may want to consider ways to reduce your cost of business. This might include shopping for new suppliers, increasing prices or even temporarily working out of your home.

5. Financing schedule

Most of us can’t launch a new business entirely on our own. Because loans are an unfortunate fact of life in the startup world, every business plan should include a loan summary and financing schedule. Take note of the types of loans incurred, including interest rates and expected terms as well as securities information. After all, potential lenders want to know that you have a solid plan to pay off existing debts before investing more money in your business venture.

If you’re thinking of starting your own business, then you’ve probably heard the bleak statistics. According to one report, as many as eight in 10 startups fail in the first 18 months. To give your business a fighting chance, you need to have a strong financial plan in place before you launch.

By: April Maguire

Source: How your small business can maximize profit & minimize loss with a financial plan

1.37K subscribers
In this video, Kelly discusses how to maximize profits in business in just three simple steps. By taking advantage of what resources you already have within your company, you can maximize profits and grow your business. Your company can figure out how to improve sales by analyzing what your business is doing so already…and what your business is not doing. By putting these steps into action, you can figure out how to attract customers and increase profits Ask yourself: • When was the last time you last raised profits within your business? Are you getting what you want? • Is your business selling the right kinds of stock including individual packages, group packages, etc. for your services? If not, these kinds of products would bring in money that your company is not seeing already. • Are you engaging with previous customers? If not, these customers are just as important to figure out how to attract customers to your business. Want a quick overview of topics? Check out the time stamps below: 00:49 – Charge what you’re worth to grow your business 1:42 – When was the last time you raised your rates? 2:08 – Consider having reoccurring revenue to maximize profits 2:40 – Fortune is in the follow up! Make it your business growth strategy Learn how to improve your outlook on money but also create more income within your business. Not only will you learn to improve your vision of money but rethink your ideas so you can create new ones. ======================================================== THANK YOU for taking the time to watch these videos!! If you like what you’re watching, comment below to start a conversation! =================================================== To learn more about our program that teaches you how to build and scale your business to create more freedom go to: http://www.KellyRoachCoaching.com/yes ======================================================== Visit the Kelly Roach Coaching online store for products and programs to help you grow your business! http://www.kellyroachcoaching.com/shop ======================================================== **Click Below to SUBSCRIBE for More Videos** https://www.youtube.com/channel/UCwyA… ======================================================== Kelly Roach Business Growth Strategist, Rapid Business Growth Coach, Author, Host of Unstoppable Success Radio http://www.KellyRoachCoaching.com ======================================================== Join the conversation: Facebook: http://www.facebook.com/kellyroachint… Twitter: http://www.twitter.com/kellyroachint YouTube: http://www.youtube.com/kellyroach ====================================================== To learn more about how to grow your business and how to increase sales, watch Kelly’s “How to improve your Money Mindset” video at https://youtu.be/1mo_Fvrgpw4

 

US Futures Higher Ahead of November’s Jobs Report

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At around 02:15 a.m. ET, Dow futures rose 55 points, indicating a positive open of more than 56 points.

Futures on the S&P and Nasdaq were both slightly higher.

On the data front, the Labor Department will release nonfarm payrolls for November at 8:30 a.m. ET.

At around 02:15 a.m. ET, Dow futures rose 55 points, indicating a positive open of more than 56 points. Futures on the S&P and Nasdaq were both slightly higher.

Market focus is largely attuned to global trade developments, following an upbeat tone from  Donald Trump.

On Thursday, Trump said the world’s two largest economies were inching closer to a trade deal. His comments come as investors continue to closely monitor the prospect of a so-called “phase one” trade agreement, with less than 10 days to go before Washington is poised to impose even more tariffs on Chinese goods.

Dec. 15 is the date when tariffs on another $156 billion in Chinese goods will go into effect.

The U.S. and China have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

Nonfarm payrolls

On the data front, the Labor Department will release nonfarm payrolls for November at 8:30 a.m. ET.

The eagerly-anticipated figures are expected to show strong job growth last month, reflecting a temporary boost from returning General Motors autoworkers. Economists polled by Dow Jones are expecting 187,000 jobs added in November — one of the highest estimates this year ahead of a jobs report.

Unemployment rate data and average hourly wages for November will both be released at the same time.

Consumer sentiment for December, wholesale trade figures for October and the latest reading of consumer credit will all follow slightly later in the session.

In corporate news, Big Lots will publish its latest quarterly figures before the opening bell.

By: Sam Meredith

Source: http://www.msn.com/en-us/money/markets/us-futures-higher

11K subscribers

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http://www.StockMarketFunding.com Stock Futures Gain Ahead of Key November Jobs Report (VIDEO). Stock index futures pointed to a sharply higher open for equities on Wall Street on Friday ahead of the government’s November employment report, which is expected to set the tone for the month of December. The knee jerk reaction on the jobs report was initially positive and the (SPY) was able to hange on to the majority of the gains it had in pre-market before the report. A few minutes after the trading report the SPY was trading at $126.45. After the markets had some time to digest the number, the SPY gave up $.20. Stocks are set to rise on the opening bell and we’ll be closely monitoring the today’s price action and trading ranges. Stocks Gapping Up List PCLN GOOG AAPL AGQ SINA TQQQ SI WYNN WLT BIDU AMZN CF ERX PVH CMI GS APA JOYG LULU NTES GOLD GPOR GLD GMCR FFIV SOHU CVX MA DE DECK WHR TZOO RIO MOS CAT SOXL SLB CLF WLL APH Stocks Gapping Down List TVIX SOXS FAZ VXX BIG INFY RIMM EDZ TLT ERY AVGO Please like, share, subscribe & comment! “Stock Market Google +1” http://gplus.to/StockMarket Video RSS Feed http://feeds.feedburner.com/traderedu… Free Trial Signup http://onlinetradinginvesting.eventbr… Trading Community (Free to Join) http://www.DailyStockCharts.com Follow us on Facebook: http://www.facebook.com/OnlineTrading… Tags “stock market” “smf street” “smf analysis” technical analysis” “stocks trading” “technical analysis stock market” “the stock market” “options trading videos” “technical analysis” “stock market live” “dow analysis” “stock market trading education” “technical analysis stocks” “market analysis” “stock charts” “stock analysis” “stock chart” “chart analysis” “stock technical analysis” “stock market analysis” stocks trading stock market markets “stock markets” “stock market news” “financial news” “trader education” “trading education” “stock options” “Day Trading” “Stock Market” “Learn How to Trade Stocks” “Online Trading” “Online Stock Trading” “Trading Education” “Trader Education” “Stock Trade” “Trading Stocks” “Swing Trading” “Learn To Trade” “Free Stock Market Education” “Online Stock Trading Training” “Stock Trading Course” “Stock Day Trading Strategies” “Stock Trading Strategies” “Day Trading Strategies” “Stocks Education” Stock Trading Analysis Online Stock Trading market stocks finance economy news tutorial investment technical options futures stocks Stock Report Video Market Trading Forex Business November “Futures Contract” Analysis Finance Economy News Technical Trade Investment Options Markets “jobs report” “November jobs” “stock futures” “Stock Market” SPY DIA QQQ Nasdaq NYSE Market

 

Business Have Been Practicing Social Responsibility For Decades, But Is That Really A Good Thing?

The jury is out on whether corporate social responsibility (CSR) programs will one day make the world a better place. But this much is pretty clear: They’re already benefiting the companies that have implemented them. And in some unexpected ways.

Specifically, CSR has become the weapon of choice for what is known as, in corporate speak, the three R’s: Investor Relations, Human Resources, and Public Relations.

But before we dive into details, a CSR mini-lesson is in order. First off, CSR isn’t an overnight sensation. Over the past couple of decades, companies have been embracing the idea that they need to do more than just make a profit for shareholders. Do-good efforts slowly evolved from passive and limited corporate philanthropy programs—giving to the United Way, for example—to broader and more active CSR programs. Those would take on major social issues like Goldman Sachs’ 10,000 Women program, which in partnership with the International Finance Corporation (World Bank) has delivered $1.45 billion in loans to women-owned businesses in developing countries.

Now, they have evolved even more. Many companies are now incorporating impact-on-society considerations into core business activities. For example, Starbucks only uses “ethically-sourced coffee.” Programs like these are often focused on “sustainability.” In August, 181 CEOs of the country’s largest corporations signed a Business Roundtable statement committing to managing their companies not just for shareholders, but also for customers, employees, suppliers, and communities.

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Photo Illustration by Ryan Olbrysh for Newsweek; Getty 9; Buzz Courtesy of General Mills, Cesars Courtesy of Caesars Entertainment

The idea behind all of these efforts is the well-worn slogan “doing well by doing good,” which means that being a positive force in the community will enhance a company’s reputation, which in theory will pay off in more sales, lower costs and over the long term, more money for shareholders.

Can you even measure something like this? Stephen Hahn-Griffiths, chief reputation officer of the Reputation Institute in Boston, says you can. He reels off a string of statistics, like “40% of the reputation of a company is related to corporate responsibility” and says his organization’s research proves that reputation is a leading indicator of stock market capitalization, or the total value of a company’s shares. In other words, he adds, “CSR has a multiplier effect” when it comes to a company’s value. But CSR can be risky. And take a little guts.

According to analysts, CVS’s 2014 decision to stop selling tobacco products cost it $2 billion a year in sales and caused the stock price to drop. (Investors took a $1.43 billion hit that year according to Martin Anderson of UNC Greensboro.) In 2010, Campbell Soup announced it was reducing the salt levels in many of its soups, a decision they reversed the following year when sales fell by 32%.

Meanwhile, in 2018, Dick’s Sporting Goods stopped selling assault rifles. On a panel at this year’s Aspen Ideas Festival, CEO Ed Stack said that decision cost them customers and employees. He notes that many of the customers who applauded the decision at the time seem to have forgotten, but those who were in opposition have not. “Love is fleeting,” he says. “But hate is forever.”

But many companies feel the do-gooder dividend outweighs the risks, both in relations with consumers and in day-to-day operations.

Brad McLane, who recruits high-level positions at RSR Partners, says, “Companies aren’t doing it just to say they have it. My clients are incorporating it into how they do business—what ingredients they use, where they source, how they design products.” Megan Kashner, clinical professor at the Kellogg School of Management’s Public-Private Interface agrees. She’s says that we’ve moved from “greenwashing programs that mimic CSR” to an era of “authentic CSR.” Greenwashing is the practice of making misleading claims that make a company appear more environmentally or socially conscious than it is, for example, when BP began touting itself as being environmentally conscious through a $200 million public relations campaign, only to have a string of environmental disasters—some of which, according to a government report, were caused by corporate cost-cutting to boost profits.

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BP is the subject of protests by Greenpeace activists over oil drilling in the North Sea. Christian Charisius/picture alliance/Getty

Simon Lowden, Pepsico chief sustainability officer, says, “It’s woven into how we operate as a business. For instance, we need to maintain our license to operate in water-stressed regions, so we’d better focus on being responsible stewards of water. It’s not only the right thing to do, it’s important to our business.”

CSR is particularly useful in human resources. Rebecca M. Henderson, holds the John and Natty McArthur Chair at Harvard and is finishing a book on this topic, Reimagining Capitalism in a World on Fire. She says: “CSR has a tremendous impact on the morale of employees. Authentic purpose, which may mean occasionally sacrificing profits, accesses a whole range of emotions difficult to get at otherwise, like trust and engagement.”

In other words, it gets through. And that is a good thing. It leads to higher levels of productivity and employee retention.

CSR can also be a big factor in recruiting, particularly for younger employees, says Eric Johnson, executive director of graduate career services at the Kelley School of Business at Indiana University. He says, “Social impact is a big piece of the recruiting process. Probably 50 percent of that initial conversation is about what the company is doing to make the world better.”

“Beer companies used to talk about fun and sports. Now they talk about their programs to save water in the world. Social impact can tip the scales. Is a student going to choose an $85,000-a-year job over a $125,000 job because of social impact? I doubt it. But my observation is that jobs heavy in social impact often pay up to 10 percent less than comparable jobs that don’t.”

Professor Kashner adds, “These newly minted MBAs care and they care about the type of work they’re going to be doing. Maybe previous generations drew a line between work and personal life and values, but those boundaries no longer exist.” Korn Ferry, the giant executive recruiting firm, recently surveyed the professionals in its network. “Company mission and values” was the No. 1 reason (33 percent ) they’d choose to work for one company over another.

CSR is increasingly part of the conversation with individual shareholders and investors, like the world’s largest investment firm, BlackRock, which manages $6.5 trillion dollars for its clients. In his last two annual letters, CEO Larry Fink has called on companies to do more and said that BlackRock will evaluate companies on more than just financial numbers. His 2018 letter said, “As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity.” Many investment firms now have someone in charge of building portfolios around companies based on their performance on Environmental, Social and Governance or ESG. (Measuring which companies are woke is an industry in and of itself.)

One aggregator of ESG ratings, CSRhub.com, lists 634 data sources. They range from the very broad (for example, Alex’s Guide to Compassionate Shopping) to the very specific (for example, the Alliance for Bangladesh Worker Safety).

For public relations, CSR is both an offensive and a defensive weapon. CSR can be used to pre-empt the conversation in areas where companies have been criticized. Procter & Gamble’s “Ambition 2030 program is heavy on recycling and biodegradability.

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A 50-foot cigarette is “snuffed out” by CVS in New York City. Andrew Burton/Getty

But CSR can also be a useful defense. It not only builds up a stock of goodwill with the media and the public, but it generates good news that crowds out the bad. Large corporations are going to get a certain amount of press and awkward questions each day—better that press and those questions be about CSR than, say, worker safety or GMOs. For example, in 2018 when Johnson & Johnson was accused of knowingly selling baby powder with harmful levels of asbestos, Harvard professor Bill George wrote a stirring defense of the company, focusing not on the merits of the claim, but on J&J’s “Our Credo,” a commitment to integrity and customers written in 1943 (and likely the first CSR document ever produced.)

Still, not everyone is convinced. There are many who adhere to the late economist Milton Friedman’s argument that the sole purpose of the corporation is to make more money for shareholders, who can then choose for themselves whether or not they want to save the world.

Judith Samuelson, vice president of Aspen Institute and founder of their Business and Society Program, who’s worked with many of the companies currently leading the way in CSR, says, “The shareholder primacy viewpoint hasn’t gone away. And even if attitudes have changed, measures haven’t. Many executives, including CEO’s, are still paid in stock, and those who manage portfolios for institutional investors are still bonused on the value of those portfolios.”

Samuelson worries that “Companies may think these (current) programs are enough and not make fundamental change.” Kashner is more optimistic. She cites work that says large public companies are increasingly incorporating CSR metrics into executive compensation contracts.

Those who oppose CSR programs argue that trying to do two things at once, like making a profit and serving society, will destroy the effectiveness of companies.

Samuelson scoffs at this. “Of course companies can do more than one thing. Public companies have to manage multiple objectives all the time. No public company in the world would last a week if the only people they cared about were shareholders. What about customers? Employees?”

She believes that CSR really boils down to responsible decision making, doing what it takes for companies to succeed in the long term. Whatever, CSR is here to stay. It’s become part of the fabric of investing, company operations, and business school curricula.

It’s now being tracked and measured, and in business, what gets measured gets done.

By

Source: Business Have Been Practicing Social Responsibility For Decades, But Is That Really A Good Thing?

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Alex Edmans talks about the long-term impacts of social responsibility and challenges the idea that caring for society is at the expense of profit. Alex is a Professor of Finance at London Business School. Alex graduated top of his class from Oxford University and then worked for Morgan Stanley in investment banking (London) and fixed income sales and trading (NYC). After a PhD in Finance from MIT Sloan as a Fulbright Scholar, he joined Wharton, where he was granted tenure and won 14 teaching awards in six years. Alex’s research interests are in corporate finance, behavioural finance, CSR, and practical investment strategies. He has been awarded the Moskowitz Prize for Socially Responsible Investing and the FIR-PRI prize for Finance and Sustainability, and was named a Rising Star of Corporate Governance by Yale University. Alex co-led a session at the 2014 World Economic Forum in Davos, and runs a blog, “Access to Finance” (www.alexedmans.blogspot.com), that aims to make complex finance topics accessible to a general audience. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

These Married Co-Founders Poured Their Life Savings Into Their Company. Then a Mistake Almost Cost Them Everything

In 2017 Farzan Dehmoubed, a marketer, and his wife Jennifer, a schoolteacher, created the Lotus Trolley Bag, a set of washable bags with attached rods that can be hung inside a shopping cart. The bags, with features like secure pockets for egg cartons and wine bottles and an insulated pocket for frozen foods, quickly became the top-selling reusable bag on Amazon, and are now sold in stores like Wegman’s, Albertson’s, Kroger, and TJ Maxx. But getting to that point required overcoming a mishap that nearly sunk their startup. –As told to Kevin J. Ryan

We invested $45,000 into our first inventory. It sold out in 10 days. We were really excited. We called up our manufacturer and placed another order. We wired them $50,000–everything we made on the first batch and more.

Six weeks later a big container arrived. We had our friends and family help us unload it. We opened up the boxes and looked at the product, and it was nothing like the first set of bags. It looked the same from a distance, but when you actually looked at the stitching and the quality of the printing and the logo, it was not what we had ordered. My wife and I looked at each other and said, “This can’t be real.”

I remember thinking to myself, ‘We can fix this, maybe it’s just some loose thread.’ But it wasn’t salvageable. We placed a complaint with the manufacturer, even though we knew it wouldn’t go anywhere, since we were just a family business with very little leverage. We later learned it had outsourced the order to save pennies on the dollar.

We decided pretty quickly we couldn’t sell the bags. We didn’t feel comfortable putting our name on them. That meant we would have to take the $50,000 loss. I don’t think Jenn and I talked for the rest of the day. It took a day or two to absorb the shock. 

Even though the manufacturer promised us they would do better the next time around, we weren’t going to be fooled twice. I flew to multiple manufacturers in Vietnam until we found a new one we were happy with. We hired a third-party quality check company. When the goods were ready to ship, they would go in and do an audit: open up each box and check them, and send us videos. We kicked ourselves for not doing that in the first place.

We placed a new $50,000 order, which required emptying our life savings and practically maxing out our credit cards. It was two months before the new inventory came. We were pretty upfront with our customers during that time. We told them very frankly: The bags didn’t come out the way we ordered them, the shipment is going to be delayed, and we really thank you for your patience.

I think letting your customers know you’re just like them, and that you’re just trying to provide a product that they’ll be happy with, goes a long way. People related to us. They were very understanding.

We still had a lot of orders canceled though, and we gave discounts to customers who had been patient. We were nervous when the new container came–if the product was bad, we would have lost everything. But it was exactly what we’d ordered. We sold out almost right away. Because of the discounts, we didn’t make much money at all on that order, but we had our reputation.

Not putting that product on the market was one of the best decisions we ever made. If we had, I can guarantee you we wouldn’t be where we are right now. It would have killed our reviews. It would have ruined our brand.

We now have a 4.6-star rating on Amazon with more than 700 five-star reviews. We’re on pace for $3 million in sales this year. We just launched our second product, a reusable produce bag, and those same early consumers are buying it.

As a business owner, you have to make your decisions for the long-term. For us to take that financial hit was scary, but we had bigger goals in mind. We got through it. And we made a lot of loyal fans in the process.

By Kevin J. RyanStaff writer, Inc.

Source: These Married Co-Founders Poured Their Life Savings Into Their Company. Then a Mistake Almost Cost Them Everything

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Every business has risk associated with it. In this video Mr. Ashok Ajmera in very simple words talks about various kind of risks and how to manage them which can be very useful in any business.

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