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  • The Failing State of Small Business

The Failing State of Small Business

The Role of Mergers and Acquisitions Amidst the Pandemic

Small business owners who are running completely out of options (and in many cases, running out of hope) are going out of business in droves, crushed by the weight of the pandemic and without the support of an effective government.

The last thing many business owners are thinking about right now is buying a business. With so much uncertainty in the marketplace, even global brands such as Boeing have stopped their plan to acquire a major stake in Portuguese aerospace conglomerate Enbraer while open deals are on the table for companies such as Google Cloud, Nestle SA, BlackRock and Boohoo according the Harvard Business Review article, “What M&A Looks Like During the Pandemic.”

The pandemic has driven the climate for business deals to an all-time low. However, according to Fortune Magazine, “M&A is showing signs of life in the healthiest and least healthy sectors,” and the markets for business are beginning to come back.  The article goes on to report that the deals are smaller, prices are lower, there are fewer of them, and private equity is playing a much larger role in getting the deals done – all which present an opportunity for them to buy distressed companies at a discount with the expectation of substantial returns at some point.

How does this impact small businesses?

According to Bloomberg’s article, “Small Businesses Are Dying by the Thousands — And No One Is Tracking the Carnage”, there are thousands of small businesses that are going bankrupt or are simply walking away as the economy is decimated by the prolonging pandemic. Thousands more are afraid that their firms won’t survive either and they will end up in the same fate.  The loss in revenue and difficulty generating sales in their traditional format is just too much for these firms to bare.

An article in Inc. magazine, “How Change Offers New Opportunity for Buying a Business, During and After Covid-19,” shares how the Cares Act SBA subsidized loan program created an opportunity for some business owners to purchase companies that entrepreneurs may be trying to unload. As private equity financiers noted – it may be an opportunity time to purchase or partner with a struggling business at little to no money down and a delayed repayment schedule.  Unfortunately, all funds have been distributed and there doesn’t seem to be a plan in place to revive it.

While struggling companies such as JC Penny, Brook Brothers and Lucky Brand are at least being considered for acquisition as they face or have faced bankruptcy, most small businesses and small business owner are simply not in the position to be able to outlast the  devastation that the pandemic is causing.  The market simply isn’t there for many smaller retailers, restaurants, gyms, beauty salons and other businesses to survive in their traditional format.

Many companies that could potentially have a greater online presence simply don’t have the technical expertise or level of support to make the transition. The potential problem right now is this: should there be a resurgence and a secondary shelter in place or national quarantine, these companies are going to be in desperate positions.

It would be my hope that governments would focus on developing solutions for its growing number of unemployed citizens, whether they had traditional W-2 employment, they were contractors or business owners.  One would think that living in the wealthiest nation on earth would provide greater support in a time such as this. One would have thought that we had the power to better protect the country from getting to its present state.

However, that is not the case. Small businesses are not being purchased. They are not successfully partnering up to any great extent. They are not restructuring under chapter 11 because they have no customers who will bring in revenue to support the restructure.

These businesses are simply going away in the wealthiest, most powerful nation on Earth. And it is a travesty.

Business Catalyst Masterclass

To give back to the small business community, we have developed the Business Catalyst Program to help you retrench, move your company forward, and bridge the gap from where you are today to where you want to go.

We still have a few spots left for the catalyst program. Register through this link, then once we review your application, we’ll let you know if your business qualifies for it.

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  • The Only Truths for Decision Making

The Only Truths for Decision Making

What every entrepreneur needs to know about their decision-making process

When speaking to entrepreneurs and people in general, for that matter, I find that they have many ways of sorting out how to make decisions. As a matter of fact, in a recent episode of Aepiphanni | Off the Cuff, Ingrid and I talked about that very topic and the different ways that we approach decision-making.

In the article, “10 Insightful Examples of Good Business Decision Making,” author Barry D Moore asks 10 entrepreneurs how they handled difficult situations in their businesses, many of which resonated with me, such as how to build a team, whether or not to get rid of a certain client or where to locate the business. While the Q&A was certainly interesting, both the process the author used and the differences in approaches each respondent used are worthy of considering.

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  • Ideas Amid Global Chaos

Ideas Amid Global Chaos

Identifying Innovative Business Ideas in a Volatile Economy

Recessions are often a time when potential entrepreneurs are hesitant to pursue a business idea. For some, this is a time best spent to keep finances on a tight leash and to build cash reserves. However, trying times does not always equal to unsuccessful business pursuits. Some companies may fall, but others unexpectedly rise.

One company that thrived during a recession is Uber, a ride-sharing app that launched back in 2009. Back in 2007 to 2009, the U.S. fell into what is called The Great Recession. GDP fell to 4.3% and unemployment reached 10%.

This did not stop Uber founders, Travis Kalanick and Garrett Camp, from launching Uber—a business idea they thought of after having difficulties getting a ride while they were in Paris. Fast forward to almost a decade later and the company reported that the app was used to book more than 10 billion trips since it was founded back in June 2018.

Entrepreneurship is still worth pushing for, even in a time of economic difficulties. This article gives some insight on how to find the next innovative business idea.

Take a look at what is lacking in the local community

One Entrepreneur.com article mentions that it is best to have a product that is a must-have rather than offer something that is just nice to have. Business owners are often problem-solvers and the company is more likely to be profitable if they work towards solving a consumer problem.

One example is Groupon, an e-commerce marketplace that connects subscribers with local merchants. It is an example of another business that was founded during the 2008 recession. Their main goal was to help revitalize local startups and boost cash flow when banks were reluctant to lend businesses money.

The idea was to promote the products of local businesses by offering a deal per day that will only go into effect once the offer has gotten a set amount of purchases. Groupon’s founders were not set on making a lot of money with this model but years later, they are now valued at $547 million.

This shows that having an innovation mindset is one key to success and starting small can make a big impact. From serving local entrepreneurs, Groupon’s services and offers went worldwide.

Being immersed in one community gives would-be entrepreneurs a pulse of the current local economy and what the people may need. Keep looking for what is lacking in the community. Then if it solves the problems of the consumers, there is a higher chance for a business to grow from there.

Use experiences as inspiration

CEO of Energent Media, Jennifer Spencer, once said that “finding a greater purpose in your work can make all the difference for your entrepreneurial efforts.”

While a thriving business stems from the ability to solve consumer needs, an idea will not miraculously turn into a business plan if the owner  is not passionate about it.

A survey conducted by Cox Business shows that more than half of the respondents, all business owners, founded their ventures because they were inspired by the opportunity to build something from scratch. Money was not a motivating factor and only 8% of respondents saw the financial opportunities as a plus.

Dane Strangler, a fellow at Bipartisan Policy Centre, states that the longest-lasting companies were started during economic downturns as they are tougher and nimbler. He calls it a “trial by fire” because these companies have to “scrape and scrimp” to achieve success.

This is why personal experiences can help push entrepreneurs further. Since these ideas were born from something that they personally found lacking in the market, they are more likely to back up and push this initiative forward.

Starting a business during a recession is possible as it is a time when gaps are created in the market and people are looking for innovation and a way to solve their problems. Other than assessing business models that are recession-proof, entrepreneurs who can identify what the market needs can get a head start in the industry.

Business Catalyst Masterclass

To give back to the small business community, we have developed the Business Catalyst Program to help you retrench, move your company forward, and bridge the gap from where you are today to where you want to go.

We still have a few spots left for the catalyst program. Register through this link, then once we review your application, we’ll let you know if your business qualifies for it.

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  • Gaming the Virus to Win at Virtual Leadership

Gaming the Virus to Win at Virtual Leadership

Business leaders across the globe have seen global virtual teams (GVT) become the norm rather than the exception due to the world-wide Covid-19 pandemic. Working virtually has both benefits and drawbacks within a team structure. With video conferencing technologies and online data-sharing platforms already in place for most companies during the last 5-10 years, business teams easily transitioned to home-office environments as global shut-downs began. What proved challenging for team leaders, however, was how to manage and improve team engagement in a mandated virtual interaction world.

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  • Strategic Innovation for the Win

Strategic Innovation for the Win

What we should learn from Disney’s “Innovate or Die”

As a business owner, you expect change to happen.  As a matter of fact, the only thing in business that stays the same is the need to change—especially in the face of a global pandemic. As product availability, buyer habits, staffing, and distribution changes rapidly in response to or in anticipation of the external environment, business owners need to be agile.

In the period of economic and environmental uncertainty, business agility is not just a strategic advantage. It is a requirement for survival.

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  • WooCommerce vs. Shopify: Which one suits you best?

WooCommerce vs. Shopify: Which one suits you best?

According to Emarketer.com, U.S. Ecommerce is going to close 2020 with a 18% increase. At $709.78 billion, digital sales will represent 14.5% of total retail sales. This forecast responds to the regular ecommerce growth tendency and, of course, to Covid-19 consumer behavior’s impact.

In accordance with our new reality, all types of businesses have focused more than ever in reinforcing their digital channels or completely migrating their consumer’s experience towards the digital world. However, creating a website or transitioning content to an Ecommerce site is not a simple task. It requires a lot of detail, planning and vision. It is a matter of, more or less, foreseeing the future which not even the most powerful forecasting tools could guarantee with 100% accuracy.

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  • So You Want to Create a New Widget, huh?

So You Want to Create a New Widget, huh?

Whether you are planning to offer a new product or a new service to your audience, there are going to be a few things you are going to need to reconcile with before you get started.

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  • Awaken your Entrepreneurial Mindset!

Awaken your Entrepreneurial Mindset!

How your entrepreneur mindset will guide you to adapt to marketplace changes and stand out during tough times

When you started your company, you probably saw a problem that needed to be solved and felt like you were the one to solve it.  Whether it was building a better mousetrap or simply identifying time and opportunity, like every entrepreneur, you had every belief that you would go into business to succeed.

Walt Disney once said, “All our dreams can come true, if we have the courage to pursue them.”  Perhaps that is what gave you the courage to step off of what was safe and normal and take the plunge to pursue building your company.

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  • What Business Owners Wished They Knew Before a Merger

What Business Owners Wished They Knew Before a Merger

Business owners enter into mergers with other companies to attain various objectives. The year 2020 has seen a spurt in the number of M&A activities. A survey conducted by Deloitte on 1,000 corporate participants found that close to 63% of the respondents predict a rise in the number of mergers and acquisitions this year. If you’ve been considering a change in the business model, you’ll want to approach the process carefully. Here are some of the critical factors to keep in mind before entering into a merger.

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