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REAL Wellness: A Key Element In Strategic Planning During Challenging Economic Times

“The change in the world economy is of a magnitude that comes once every hundred years. We are facing an unprecedented emergency.” Katsuaki Watanabe, author of this remark, is the president of Toyota. This statement was offered on December 22, 2008 while announcing the company’s first operating loss in 70 years – $1.7 billion.

Tina Turner made famous the question, “What’s love got to do with it?” This might be a good time to ask, What’s wellness got to do with it? Is a wellness philosophy as significant in the context of economic ruin as in times that pass for normal?

America and the rest of the world are beset with burst bubbles, bailouts and bankruptcies. Conditions are beyond serious – they’re a fright. There are multiple, interrelated crises – a loss of faith in markets and the economic order, a loss of hope for the future and a diminution in social connectedness. The daily news reflects high levels of worry, fear, insecurity, stress, self-doubt and negativity. This is the context for my question: Is the wellness concept as important now as before? Or, is wellness more of an option than ever, even a luxury of sorts with appeal mostly to privileged elites with the means to get their needs met AND aspire to a good and fulfilling life?

Consider a bit more detail on the extent of the current crisis. The American economy is sinking into a recession just this side of a depression. Frustration bordering on panic is evident throughout the land. Distress marks the national mood. Job losses (533,000 of them disappeared in November), the unavailability of credit from banks (despite massive taxpayer bailout funds later channeled in part for executive bonuses), the presence of pockets of severe unemployment (almost 14 percent in South Carolina), business failures, big losses in household worth due to market declines and the burst housing bubble – this is the context for the question posed about the viability of wellness as 2009 looms. If all this does not get your attention, consider the fact that Russian academic Igor Panarin predicts a US collapse by 2010, followed by a civil war and the breakup of the nation into five different countries. (The only good news is that Alaska will revert to Russia, thereby making Sarah Palin Russia’s problem, not ours – see Andrew Osborn, As if Things Weren’t Bad Enough, Russian Professor Predicts End of U.S., Wall Street Journal, December 29, 2009.) In summary, in case you had not noticed, the world’s coalmine seems littered with dead canaries.

On a bright note, Americans will have new leadership in a few weeks. The president-elect is amazingly popular at the moment (73% approval), but even the most optimistic Democrat knows Obama is no fiscal Superman or supernatural economic turnaround messiah sent from above. Obama’s $775 billion economic recovery plan, announced a month ago, already seems too little, too late. Rebuilding the infrastructure with WPA-like bridges, roads and other projects will be helpful, but some economists predict it won’t be enough to arrest a national slide toward a deeper state of crisis. (I will refrain from expressions like ruin and despair.)

Given this context, let’s pause for a hard, cold look at where wellness fits, if indeed it fits at all. Of course I refer to REAL (reason, exuberance and liberty) wellness, a mindset or philosophy of personal responsibility, optimism and commitment to affirmative, evidence-based principles for making choices small and large. Not the same as prevention, risk reduction or illness management – REAL wellness is a unwavering focus on exceptional health and quality of life.

Little public attention is given, in good times or bad, to positive health and life satisfaction. Instead, the focus always seems to be on the many frightful consequences of NOT doing the right thing. At a time of financial crises unknown since the Great Depression, it is fitting to ask if our philosophy for good living has a place, alongside the struggle millions are experiencing to feed their families, pay their bills and provide for the welfare of their children. Is this an appropriate time to proclaim the applications of a wellness lifestyle and, if you think so, how is this communicated to those struggling at the lower rungs of Maslow’s hierarchy?

I suggest a REAL wellness mindset is always important. In hard times, little else will make a quality difference, for the better. REAL wellness will liberate those who embrace it and enable advances toward the most important kind of prosperity, namely, physical and psychological well-being. Given the stresses of today’s fiscal turmoil, perils await those who seek only comfort and relief. The best ally in the quest for economic recovery is a positive lifestyle that promotes personal health and builds upon positive social connections. Economic perils are best faced with positive attitudes, high resolve of mental discipline and peak physical strengths, not while mired in a struggle against negativity.

Wellness itself does not solve any financial problems. However, it helps in reaching and maintaining first-rate levels of physical and mental functioning. That state can in turn facilitate the pursuit of activities that best advance opportunities and manage crises.

Consider some factors that make REAL wellness a winning philosophy in hard as well as good times. As you know, REAL wellness entails:

* A disciplined focus on the bright side.

* A commitment to personal excellence.

* A regard for social support and the value of communities.

* A willingness to secure and work to maintain high standards of physical fitness.

* A continuing conscious pursuit of added meaning and purpose.

* A desire to comprehend the phenomenon of happiness and realize some measure or degree of it, as circumstances permit.

* A continuing respect for personal honor associated with the art of applied ethics

* A recognition that it’s best to want what you have and to live in the present (versus bemoaning what you had before or could have had save for an errant decision or two). An excellent book on this approach to prospering in the best sense of the word is Wishcraft: How to Get What You Really Want by Barbara Sher.

* A predisposition to take the time to appreciate the beauty around you, in natural as well as human forms.

* A sense of gratitude for the fact that, while conditions are difficult, there is so much left to celebrate and resolve to appreciate.

* An outlook marked by compassion for others in general, as well as a mindset of forgiveness for those who may have contributed to difficult circumstances. (Yes, include in the latter even George W. Bush. But, not the Devil. Humans need someone or something as a scapegoat, even if they have to invent such characters to make their saviors seem deliriously wonderful by comparison.)

Some still might fret at the contradictions in the affirmative nature of REAL wellness, such as sketched above, and hard times, massive human suffering, scarce resources and widespread worry and fear. Is REAL wellness of a positive nature not a guilty indulgence while Rome (and the rest of the world) burns? Or not?

The proper answer, I say, is Absolutely not! Major not! In fact, au contraire, no way Jose and just the opposite. Now more than ever, we need a REAL wellness philosophy to deal with challenges greater than normal. Much greater than normal, in fact.

A healthy lifestyle that includes physical, mental/emotional and social components will protect and build your immunity while maintaining and boosting your morale. The REAL wellness qualities sketched above (a partial list, I might add) are invaluable for weathering the proverbial storm (s) AND for building a capacity to flourish.

Wellness qualities are always advantageous, but when times are tough, such qualities lend toughness, as well. The weak in body, mind and morale will be first to succumb to unrelenting demands, stresses, setbacks and other misfortunes that accompany prolonged crises. Furthermore, family, friends and perfect strangers need you at your best, providing leadership, guidance, inspiration and hope. Judd Allen, like his father Robert F. Allen before him, often describes the health and other positive benefits that follow when people come together for support, for entertainment or to seek political solutions. All are helpful ways to boost well-being, no doubt even more so when budgets are light and conditions difficult.

There are no guarantees, even with a bright-side outlook, but more than ever, it will pay to adopt and practice REAL wellness. To be physically fit, mentally strong and resolute, adaptable, flexible, resilient and capable is a formula for success in bad times – and good.

If these comments seem plausible and convincing, if you agree that REAL wellness makes sense in normal times and more so in crises, then you will want to support public policies and private initiatives that make such learning and living opportunities widely available. For instance, you will want to support continuing worksite wellness programs, knowing that the common reaction to less business might be to pull back programming to save money. This is an ideal time to not only deal creatively with the current crisis but to prepare as well for the future. Let’s explore innovative new approaches to healthy, productive work forces and work settings. Similar thinking should influence the shape of health system reforms. Likewise, apply REAL wellness values introduced with varied public programs aimed at creating jobs, rebuilding the economy and making individual life and society itself better than before the economy fell apart. Perhaps solutions to the fiscal downturn will only be possible when we more effectively work together for solutions that meet the needs of all classes, not just the most advantaged.

2011 Economic Forecast – Part 2: The United States (US)

2010 is finally history. The economic recovery, which officially began in 2009, was scarcely evident as the US economy muddled through 2010. It seemed that for every piece of good news, like the strong end to the 2010 Christmas shopping season, was countered by news of a setback, such as unemployment rates that unexpectedly returned to nearly 10% during the same period.

The government’s stimulus efforts have run their course. The TARP program is officially over and tax credits for new home buyers have all expired. The economy now has to perform on its own without all that artificial stimulation.

The fed has reduced interest rates to historic lows to internally stimulate the economy. If interest rates were the cause of The Great Recession this action should have revved up the economy and put us back on track. With federal reserve interest rates at 0% the economy should be white-hot. However, high interest rates are not the problem, so lowering them did not spark an economic rebound. Here’s why with my forecast for 2011:

Unemployment Will Probably Stay Stuck Near 10%

The dirty little secret behind this statistic is that the 10% figure represents only those who currently have no earned income. Those who are working one or more part-time jobs because they can’t find a full-time work, are underemployed in their field, or who are laboring out-of-bounds of their education or training are considered by the government to be employed. When this expanded population is taken into account, the actual unemployment/underemployment statistic is most likely double the official figure.

Unfortunately, there are now multiple barriers to lowering our now chronically high unemployment level. Some of the most important are:

The huge oversupply of foreclosed and unsold homes – The reasoning here is straightforward: there is no need for new construction in a saturated market, which means no construction jobs. Jobs in support industries that supply new home construction goods and services will obviously also be affected. More on this topic below.
Continued restraint in consumer spending – more on this topic below.
Major (and many smaller) corporations continue to outsource overseas everything from manufacturing to admin support – much is made of sending low skill or semi-skilled manufacturing jobs overseas, while the US supposedly maintains its edge through high tech startups at home. The government likes to point to numerous high tech startup companies as proof this strategy is working.
Some entrepreneurs do successfully start corporations that may eventually employ 50 white collar workers. However, the product they create is outsourced to manufacturing overseas in a factory that employs perhaps 5000 workers to produce it. Granted, it may cost less per unit to manufacture there, but those 5000 low skilled or semi-skilled workers employed there are exactly the type of person most likely to be unemployed in the US.
So, manufacturing, the great economic engine that for over 100 years was the promise of the high school graduate being able to enter the middle class, is essentially gone, which in great measure explains the growing class rift in our nation.
Note that when manufacturing is sent overseas, the outsourcing company essentially has to teach the foreign corporation how to create the new product, which is new knowledge that a foreign power can use to its own benefit. China is the best example of this. We have successfully trained and paid the Chinese (and others) to beat us at our own game, as evidenced by China’s growing economic might and a political presence that now must be reckoned with.
Hiring temporary workers, rather than in-house employees – temporary or contract workers are far cheaper to hire than in-house employees who qualify for benefits like health insurance and the retirement program. The company owes no loyalty to temps or contractors, and they can be hired and fired at will.
Corporations no longer hire employees with “potential” or experience in parallel or complementary industries – major corporations have ceased to think long-term in many areas, shifting their focus nearly exclusively to near term actions that produce short-term results. Examples of this myopic view range from focusing on the next quarter’s stock earnings per share to viewing employees as a short-term commodity rather than long-term assets.
Viewing employees as a commodity results in corporate behavior of hiring what’s needed for the moment and discharging them when the immediate need disappears, which in turn results in a goal of only searching for and hiring employees “who can make an immediate contribution to the bottom line.”
The exponential increase in education, credential, and experience criteria for candidate employees over and above actual position requirements – new hire employees are now expected to “hit the ground running” and be able to “make an immediate contribution to the bottom line.” Like a new electronic gadget, a new employee should be able to “work right out of the box.”
This new expectation was unheard of only a few years ago during the era when employees were a valuable asset to be invested in over the long term. Then, new hires weren’t expected to be able to make meaningful contributions until they had been with a corporation long enough to learned the ropes.
Now, most hiring authorities don’t even make the effort to understand what skill set is actually required to perform the job they’re hiring for. So, advanced degrees, myriad commercial certificates, and recent experience in everything are specified in the hope that the overkill will result in a person eventually hired that can do the job.
These excessive requirements are then passed to the human resources (HR) department, which dutifully uses them as an inflexible tool to screen the applicant database. The popularity of online employment applications has exacerbated this problem, where the HR person can enter “MBA” as a search term and never see the many capable, well qualified people who are discarded because they don’t have this degree.
As an example, you may not need an engineer with an MBA to be the head of a maintenance department. The better candidate may well be a military veteran non-commissioned officer (NCO) who successfully ran a repair depot. Hiring the former NCO would bring superb talent and a broad background into the organization, could probably be hired at a substantial savings for the company, and may stay with the company longer than the highly credentialed engineer who is intent on furthering his career climbing the corporate ladder.
Further, most large corporations have returned to profitability during the Great Recession through extreme cost cutting, mostly through layoffs in their labor force. Employees who survived the purges were told to take on the extra responsibilities of their former colleagues, so technically the same amount of work is being performed by fewer people (which is responsible for the great gains in national productivity figures compiled by the government and widely reported in the media). This approach obviously places all the necessary skill set eggs into fewer baskets, which creates entirely predictable problems when the new multi-taskers eventually leave and corporations try to replace them with another single person who can do the newly defined mega-job, rather than spreading skills (and risk) over several employees.
The well documented bias against hiring the unemployed – On the surface this bias may seem counterintuitive, after all, someone who’s unemployed is readily available and could probably start Monday, right?
However, the corporate thought process generally follows this logic path; “most corporations layoff their least productive workers during a downsizing, therefore if you’re unemployed you were among the least desirable or productive workers or you wouldn’t have been laid off. It follows then that there must be something wrong with you that we don’t know about, otherwise you would be employed” regardless of your skill set, recent experience, or personal references.
It’s unfortunate that this twisted and nonsensical logic that is frequently imposed on situational “outsiders”, from marital status to any of society’s other membership groupings, has now found its way into corporate hiring mentality.

I recommend Louis Uchitelle’s book, The Disposable American, for more on this topic. (I have no financial interest in this recommendation.)

The unemployment bottom line – The unemployment/underemployment rate will little change in 2011, with those fitting the categories above most affected.

Real Estate Foreclosures Will Continue at a Record Pace and Housing Prices Will Remain Depressed in Most Areas of the Country

The government statistics here are shocking, with estimates that nearly half (HALF!) of all homeowners with mortgages have homes that currently appraise for less than the mortgage value; they’re “upside down”. Further, nearly 20% of all mortgages nationwide were in some stage of foreclosure at the end of 2010, with rates much higher in the hardest hit states of Michigan, Florida, Arizona, Nevada, and California.

The efforts of the banking industry to work through this massive backlog lead to the “robo-signing” fiasco, where foreclosure paperwork was being routinely approved under oath en mass without verifying what was being attested to in the court documents. Faced with active investigations by attorneys-general in all 50 states, banks temporarily suspended foreclosure proceedings during the 4th quarter of 2010 to straighten out the mess they created, which the news media widely (and inaccurately) reported as a sign the economy is improving. However, the backlog must be worked through to get the bad debt off the banks’ books, so foreclosures will resume at perhaps even a greater pace when the paperwork is straightened out, probably by the second quarter of 2011.

The huge inventory of foreclosed and otherwise unsold homes will keep housing prices depressed. As long as there are so many unsold homes on the market (with more to arrive when the banks resume foreclosure processing), the oversupply will keep prices down and may drive them ever lower in 2011. Even after the foreclosure backlog is reduced, many new home sale listings will appear on the market when prices start to rise from the concealed backlog of those who want or need to sell, but didn’t list when prices were low, which will depress prices again. I wouldn’t be surprised if it took until 2015 to work through this immediate and hidden backlog.

The real estate bottom line – in most markets, residential real estate values will remain depressed or will decline further in the high impact states. Now is the time to buy if you have income security, the necessary available cash, an astronomical credit rating to qualify for a mortgage, and can find a bank willing to lend.

Energy Prices Should be Stable

Recent articles in authoritative publications have reported that on-shore crude oil storage is full to capacity and that mothballed tankers functioning simply as floating storage tanks are anchored off the coasts of Great Britain and Iran. A recent inventory showed that 50+ tankers were anchored off of the coast of England alone.

Most oil producing countries derive the majority of their national income from crude oil sales, so their incentive is to keep pumping, regardless of market price, in order to maintain their revenue stream, which will keep supplies abundant. So, the world is awash in crude oil, with inventory stores in excess of demand, putting downward pressure on gasoline prices. Overall, gas prices should remain relatively stable during the first half of the year, absent an unplanned disruption like a major refinery fire or a hurricane that destroys oil platforms. That’s good news for every household and corporate budget in our petroleum-based economy.

The wild card is China, again. Prior to the recession, China became a net importer of crude oil and was starting to compete on the world market for the limited supply of crude available (remember $150 per barrel spot market crude?). If other world economies improve and start consuming more oil, then everyone will return to competing for limited energy supplies on the world market. And China will most certainly win any contest here, because their trade surplus has given them an unlimited supply of dollars to buy oil with.

The energy bottom line – energy prices will most likely slowly increase throughout the year as the fragile recovery continues and the economies of the world pick up steam.

An alternative scenario is that energy prices remain stable when China’s real estate bubble collapses (see 2011 Economic Forecast – Part 1: The World View from a US Perspective for elaboration on this possibility), causing a large loss of personal wealth for the average Chinese citizen, dramatically driving down internal consumption, and leading to China’s own internal economic recession.

Crude prices will not decline because OPEC will adjust production to maintain oil in the $90-$100 price range.

Consumer Spending Will Remain Flat

People out of work spend only what they have to on the barest necessities. People who are afraid they will be next out of work, cut back on spending in order to save for what might come to pass, and also focus on buying only the practical, needed, and necessary. People who are secure in their jobs, but don’t want to be seen conspicuously consuming during hard times, will curtail their luxury purchases. Need I say more?

Further, it’s underreported that the historically low interest rates have meant a sharp drop in savings interest income for retirees. Retirees dependent on interest income have had to sharply reduce their spending in order to avoid further encroachment on their principal. Typically, the budget cuts include things like the lawn service contract, the beauty shop, dry cleaning, and eating out, all of which impacts local businesses.

The modest economic improvement widely reported during the last half of 2010 is probably the result of businesses simply restocking depleted inventories to low levels, which is good news but not great news. However, the buying surge that turned the 2010 Christmas shopping season into a last minute success means that retailers will start 2011 on better financial footing because they won’t have to start the year having to liquidate seasonal inventory (and profits) at 50%-70% off to generate cash flow.

Additional reasons that I think consumer spending will continue to be restrained in 2011 include the increased personal savings rate (an eventual benefit, but lowers consumer spending in the short term), a focus on reducing credit card debt, unplanned new car payments in the household budget resulting from the federal Cash for Clunkers program, and credit that’s either not available at any price or only at unfavorable interest rates and terms when it is.

The consumer spending bottom line – consumer spending on non-essential purchases will continue to be restrained in 2011. When consumers do make purchases, they will focus on the needed, necessary, and practical, and avoid luxury items even if they can afford them. Family vacations will be to local or regional destinations, rather than the exotic venues.

The Credit-Starved Economy

It’s widely reported that large corporations are currently hoarding large amounts of cash. This stockpile gives them the ability to hire, expand production, and grow organically if they wanted to, but they are refusing to do so in light of what I’ve shared above. Even a White House meeting with the president in 2010 wasn’t enough to persuade them to resume hiring if they can meet market demand with staff on hand.

However, large corporations continue to have aspirations to grow and, rather than slowly growing organically, the method they’re often choosing is rapid growth through acquiring their competition. When companies combine, the result may possibly be good for the new, larger corporation (the marriages generally have a 50-50 chance of commercial success), but the result always has two negative economic impacts:

The cash and loans required to buy the competitor removes large amounts of capital from the market that would otherwise be available for mortgages and loans to small and mid-sized businesses (SMBs), and
Mergers always result in layoffs as the new corporation works to eliminate duplicate functions to help pay for the merger. After all, you don’t need two payroll departments, two HR departments, two training departments, etc.

So, large corporate mergers have a break even chance of internal benefit, but nearly always have a negative impact on the economy.

Credit will most likely continue to be tight for SMBs in 2011. Banks say they have money to lend in this area, but the reality is the qualifying bar is set so high that very few will be able to meet it. It’s noteworthy that this economic barrier persists despite the availability of government Small Business Administration loan guarantees and the president repeatedly summoning banking CEO’s to the White House to urge them to begin lending again.

Finally, a common source of loan collateral for SMBs is no longer available in most cases. In areas hard hit by the collapse of the real estate market, the business owner’s home equity line of credit has been completely erased if the property value is now less that the outstanding mortgage balance. Even if there is some equity technically available, few business owners have the stratospheric credit scores necessary to qualify for the loans.

If longer term loans remain unavailable, SMB’s will turn to the only recourse they have left, which is financing their need for operating cash with personal credit card debt. Unfortunately, this option is fraught with danger because lending institutions issuing credit cards are rapidly changing card terms, raising interest rates to usurious levels, requiring most new cards to have variable interest rates (a practice which helped get us into this mess in the first place), and lowering credit limits in response to the new federal laws enacted in February 2010. These moves effectively sidestep the legislation intended to curb these abuses.

At a time when banks can borrow at 0% from the fed, it’s not uncommon for the credit cards they issue to charge 15% or more on outstanding balances. Further, the new laws do not apply to corporate credit cards, exposing the company to even greater financial risk if the owner is forced to finance via this route.

The credit bottom line – expect little or no improvement in credit availability in 2011.

The Impending Commercial Real Estate Tsunami

Commercial real estate values and investment income will probably take a drubbing as vacant store fronts drive down rents renegotiated in 2011. Failing businesses have created a glut of vacant commercial space in many areas and vacant commercial space doesn’t generate income. Surviving business owners will have several alternative locations to choose from and will use the oversupply as leverage to negotiate lower lease rates for the space they do occupy for as far into the future as possible.

And devalued properties of all types will have an adverse effect on local tax digests, forcing local governments to either raise property tax rates or trim operating and school budgets. Which of these choices do you think your local government will make?

Deficit Spending and the Growing Threat of the National Debt

Fiscally, the United States is in a mess and is rapidly approaching the financial meltdown so many European countries are currently experiencing.

The annual budget deficit – the federal government currently spends $3 for every $2 of revenue it receives and the annual spending gap is now over a trillion dollars (a TRILLION dollars) a year. Proposals to close this gap through either increased tax revenue, such as eliminating the homeowners mortgage deduction, or by cutting spending, such as cutting back on Medicare entitlements, meet with howls of constituent protests and go nowhere in a hurry. Note that Medicare alone accounts for 12% of all federal spending and that figure is certain to increase as baby boomers begin to retire in large numbers from the workforce.

The federal government currently spends $1,000,000,000 more every 8 hours than it brings in. It’s ridiculously obvious that this can’t continue for long, yet collectively Congress keeps kicking the can down the road to tomorrow (figuratively speaking) instead of dealing with the issue.

The US government borrows money to support this deficit spending through the sale of US treasury bonds. During World War II the debt was largely financed internally with American citizens buying “war bonds” at rallies that featured real-life war heroes on display.

Today we sell our bonds to foreign powers finance the deficit. Who’s buying them? The largest single buyer, by far, is China, followed by Japan, Germany, and the Arab OPEC nations. So, we are effectively (and quietly) being held hostage to those who buy large amounts of our bonds, because if they don’t buy them, then we can’t operate the federal government. It follows, then, that the nations buying our bonds use this leverage to exercise considerable influence in our behavior behind the scenes. We are no longer a totally independent nation.

Larry Burkett’s book, The Illuminati, is a fictional work about a foreign country that brings down the United States using exactly this leverage. For those who say that can’t happen, the book makes an interesting read of a plausible scenario. (I have no financial interest in this recommendation.)

The national debt – The accumulated national debt has reached an unimaginable size. The previous administration added more to the national debt than all previous presidents combined, including Ronald Reagan’s, and the current administration is on track to exceed this sorry milestone in just its first 4 years in office. We continue to add to this debt, which must be paid back at some point, almost without thought. For example, the president’s much heralded tax deal forged at the end of 2010 added $900 billion dollars to the national debt in extended income tax cuts, additional jobless benefits for the long-term unemployed, and a temporary cut in social security taxes without corresponding cuts in social security spending, at the stroke of a pen.

Predictions are, depending on interest rates, for interest payments alone to equal all non-defense spending of the federal budget by perhaps 2015.

There are only 4 ways out of this mess and they will become increasingly painful the longer we, as a nation, avoid changing our spendthrift ways:

Massively cut spending – this will be very difficult, since the federal budget would have to be immediately cut by 1/3 to be able to simply stop borrowing. It would have to be cut even further to begin paying back principal on the debt.
This step will further impact the national unemployment rate as large numbers of government employees are laid off in the downsizing, as we have seen happen in the European Union bailouts. Most popular government programs would have to be axed or pushed off on the states to fund, such as Medicare, which currently consumes 12% of the annual federal budget alone.
Enacting huge tax increases – this move will generate howls of protest because no one wants to pay more of their hard-earned money for fewer services. As an example, how easy do you think it would be to eliminate the cherished homeowner’s mortgage interest deduction?
Defaulting on the debit payments – this is an admission of bankruptcy, pure and simple. If we take this route the government’s access to credit on the world market would immediately dry up. After all, if we stop paying on our current bond obligations, how many more bonds do you think we could sell to foreign governments the next time we needed to borrow money?
Printing dollar bills – this is the route to hyperinflation, because as the money supply increases the value of each dollar falls. The most often cited example of the folly of taking this route is the Republic of Germany following World War I, as it struggled to meet the surrender terms imposed by the Allies and make payments to the victorious nations for the cost of the war. Germany was forced to print money to meet its financial obligations, sparking the hyperinflation recorded in the pictures of German citizens in the 1920’s hauling wheelbarrows of money to the grocery store to buy a loaf of bread.

The national debt bottom line – At the present rate of deficit spending, interest payments on the national debt will overwhelm the national budget by 2015. At that point we will be left with 4 stark choices to deal with the mess we’ve created: massively cut federal spending, enact huge tax increases, default on the debit, print money, or do some combination of these choices. The outlook is stark.

The US National Forecast Bottom Line

What does all this mean? Well, in the near term a realistic forecast is to be cautiously optimistic that the fragile recovery will continue, absent any further shocks to our financial system. However, the economy will be dragging a ball-and-chain along with it in the form of high unemployment, depressed commercial and residential real estate markets, the lack of available credit, the corporate preference to acquire the competition rather than hire new employees, and the looming national debt crisis.

If the scenarios above make sense to you then my suggestion is for small and medium-sized businesses, like professional practices that depend on elective procedures and service industry businesses, to be prepared for clients and patients to continue to defer discretionary spending until at least the second half of 2011. If you’re a retailer, you should keep inventories lean for the first half of the year.

And my personal recommendation is for everyone to reduce their personal debt to as close to zero as possible by 2015.

Will this all come to pass? It’s hard to tell because we haven’t been here before, but I’ve shared my best guess. Do you think I nailed it or do you have a different opinion? I look forward to your comments.

Marketing Under Pressure – A Look at How the Current Economic Climate is Impacting the Way We Market

As recession begins to bite hard, ‘spending’ is the watchword of the moment. While the government introduces financial initiatives designed to encourage higher spending, people and businesses are looking for ways to cut their budgets. Despite the recent reduction in VAT and government appeals to banks to increase lending, businesses can’t ignore the lower revenue figures as customers retreat in large numbers.

In times of financial uncertainty, a review of business operations will highlight those functions deemed non-essential or over-resourced. Historically marketing is usually among the first to be culled. It is not a well understood discipline and invariably its implementation is lacking. By and large, it is seen more as a cost centre than a revenue generator, working to bring new sales leads to the business. Properly conceived, planned and implemented marketing strategies can raise an organisation’s profile in the marketplace, in turn strengthening brand awareness and loyalty, all of which eventually leads to more customers and ultimately more revenue.

That said, here are a few words of warning. Cutting your marketing budget without thought to the business impact can be devastating. Experienced marketers know this but are under pressure to reduce spending nevertheless, and never more so than now. Conversely, there are those organisations that hold marketing up as one of the tenets of business success in all weather. These are the companies that believe if you throw enough money at marketing, eventually more customers will come and the coffers will start to fill. But without a plan behind the intent, this approach is simply a waste of money and potentially fatal to the business. There is another way.

It is accepted wisdom that marketing is essential to a prosperous business. But is it possible to maintain marketing effectiveness on an ever-decreasing budget? To answer this question, we first need to understand three things: what exactly is marketing these days, why is it so important anyway and how is it changing?

MARKETING’S EVER INCREASING IMPORTANCE

To the uninitiated, marketing is a synonym for a wide range of disciplines and activities that somehow fall into the same bucket: advertising, public relations, exhibitions, promotions. It’s true that marketing covers all of these and many others, but what actually is it?

Marketing is essentially project management in disguise and has already been functioning well through outsourcing for a significant period of time. The proliferation of marketing activity, widening supplier resources and the increasingly short term view of the role of the marketing director have all combined to create the right environment for outsourcing marketing from the strategic through the bottom line operational level.

As recently as ten years ago, certain businesses did not need to market themselves as we understand it today. Businesses such as estate agents, housing developers and banks simply opened their doors and customers would come to them, ready to buy. These businesses saw marketing as a way to rise above the competition, but there was still essentially plenty of business for all of them. However, as markets have fractured and changed, the competition has become ever more fierce and new business models are continuously being developed. On top of that, in the current economic climate it is these traditional pillars of the economy that are suffering the most.

In light of these circumstances, marketing has taken on a new importance. It has become paramount not just to business success but also to business survival. Brand presence in itself is no longer enough. It is continuous brand strengthening and communication through robust marketing strategies that forms the foundation.

Ultimately though, marketing is about understanding your customers and your market. What have you got to sell, who are you trying to sell it to, and what is the best way reach them? In addressing these issues, the successful marketing programme will cover market research, define the most appropriate channels to market and the most effective media to reach the right audience, and articulate why the market should buy from them. This last point is the cornerstone to success marketing, otherwise known as the ‘Unique Selling Proposition’

Having outlined what marketing is and why it’s so important, surely it would be simple enough to work out a plan and execute it. Unfortunately for marketers everywhere, this is easier said than done. Why? Because marketing is undergoing radical change.

THE CHANGING FACE OF MARKETING

Since the dawn of the Internet age, online marketing has unfolded at an alarming rate. At no time is this more true than today. With the advent of the so-called ‘Web 2.0’ over the last few years, social networking has seen a proliferation of new tools and online media have opened up new and diffuse channels to market. Marketing today is in many ways unrecognisable from the discipline it was, even ten short years ago.

This change has brought increasing complexity to strategic marketing and planning. Internal marketing departments are being spread more thinly, relying increasingly on a growing list of supporting agencies each dedicated to a particular marketing activity. It has also meant that marketing managers and executives have taken on more of project management role as they supervise and coordinate an abundance of outsourced activities. Similarly, the marketing director’s role has become fundamentally project-based. Marketing directors are often tasked with a series of strategic restructures as the business continually morphs to adapt to its market. This has imbued the role with a short-term outlook, such that today it is unusual for a marketing director to stay with an organisation for more than two years before moving on.

In finding a solution to the challenge of achieving effective marketing on a strict budget, it is worth noting that the prevalent marketing agency landscape developed out of necessity, not through careful planning. Outsourcing on a piecemeal basis is not a cost effective formula. It has been technology driven, not marketing driven. And there are a few fundamental issues with this approach. Firstly marketing executives do not ordinarily make good project managers. They lack the advanced skills required to integrate and synchronise a myriad online and offline activities into a single, mutually supportive workflow.

Outsourcing marketing functions is not a new concept. In fact it is a tried and tested way to quickly reduce costs by moving core functions outside of the organisation. It was first widely applied to customer service through call centres. However sales and marketing departments quickly discovered that if you outsource on a purely tactical basis, it can backfire on your business. It is important to build in strategic processes and controls to maintain service quality. The challenge for marketing is how to achieve quality control across such a diverse and disparate range of activities. One answer could be to combine outsource partners with a project management team. Another approach is to integrate these functions and elevate the outsourcing relationship to a more strategic level. To identify the best approach, we need to understand ‘marketing integration’ and how this can create cost efficiencies.

INTEGRATING OFFLINE AND ONLINE MARKETING

While today every business considers having an online presence as a necessity, tomorrow it will be blogs, giveaway content in the form of PDF reports and email newsletters, online communities and social networking that will become essential to every marketing strategy, programme and campaign and not just the domain of the forward-thinkers.

These new ways of communicating with the market are moving seemingly further and further away from the real world. Aside from keeping up with developments, marketers are faced with the challenge of integrating online and offline channels so that they support and reinforce, rather than contradict each other.

On top of this, technology has levelled the playing field. Now anyone can try their hand at marketing. Publishing a newspaper or magazine is possible with a software programme and a broadband connection. Achieving professional quality media is now accessible to the man on the street. Similarly online marketing is open to everyone. However, the ability to market does not guarantee marketing success. Despite ease of online communication, the availability of tools for fast analysis of market data and the speed of digital delivery, superior marketing implementation can only be ensured when it is backed by a consistent business strategy and coordinated marketing programme. More importantly, integrating traditional offline marketing with the many disparate forms of tactical online activities in a strategic way will be essential to success.

COST EFFECTIVENESS IS MARKETING GOLD

As marketing agencies continue to proliferate and shift towards more and more specialised niches, it begins to make sense to consolidate the mainstream functions within an integrated framework. Logically, however, this would suggest higher internalised costs. To avoid these costs, without compromising effectiveness, suggests moving the mainstream function outside the organisation.

However, this makes little sense if executed at the tactical level. What is needed is a restructuring of the traditional outsourcing model so that the lines of communication are at board level. Strategic public relations and public affairs consultancies have worked this way for many years. The timing and conditions are now right for marketing to adopt this approach: to move from a tactical project management style to a higher-level strategic partnership with their outsourcers.

Put simply, modern outsourced marketing takes the accepted concept of interim management and retained agencies to a higher level. In an outsourced arrangement, highly skilled marketing consultants and managers liaise with specialist agencies to an agreed strategy and budget, in a well-constructed operating process to deliver on planned objectives and targets. By taking an holistic view from a brand perspective, outsourced marketing has the potential to lift the bar on performance and programme integration in a way that traditional marketing management finds hard to achieve within modern cost structures. Key to achieving this is integration of the internal marketing function at the strategic level of the business.

Outsourcing marketing execution is the traditional view taken by organisations when attempting to strip out costs, but within today’s marketing landscape this can only come at the expense of marketing effectiveness. Modern outsourcing should aim for strategic consistency across internal marketing functions. This has the additional benefit of placing overall responsibility and planning at an organisational level rather than with ultimately one departmental representative, the marketing director.

As a contractual arrangement, strategic outsourcing establishes common operating practices and reportage, which work in accordance with KPI measurements and agreed ROI indices. From a marketing perspective the strategic outsource model has the organisational intelligence necessary to achieve a balance mix of online activity and offline in an integrated manner.

CHOOSING A STRATEGIC OUTSOURCED MARKETING PARTNER

As a means of replacing high cost, high turnover internal function with a strategy partnership that communicates at board level, the outsourced marketing model has much offer. It is equally suited to growing companies that have yet to develop a marketing department as those that are downsizing. For those marketers working under the conditions accompanying a merger or acquisition situation, or companies and brands stripped of resource through administration, outsourced marketing also presents an attractive option.

If you decide that outsourced marketing is for you, you’ll want to ensure that you engage an outsourcer that agrees to a planning process that involves clear ROI and KPI objectives. Ideally this will be presented in the form of a marketing dashboard to allow a continuous evaluation performance on the fly. You should also be careful to select an outsource partner that can offer a complementary mix of senior consultants with skills that span all media and marketing channels. Naturally it is also critical that this experience covers both online and offline environments. Finally, it is important to assess whether your outsourcing partner can offer flexibility in its fee structure. For example, can it package a tailored launch service for an all-on cost but also provide supplementary services on a ‘top-up’ basis as and when required?

Cost savings are readily achievable with a fully outsourced marketing function, provided consultation is observed at board level. Since services are rendered on a ‘time block’ basis, it is easy to adjust the marketing resources ‘tap’ to whatever level suits the budget. Provided the partnership is structured correctly, marketing results should not be adversely affected. In fact, the enhanced planning and creative development process that comes through an outsourced arrangement can lead to improved marketing effectiveness and sales performance that proves to be as valuable as lower marketing costs.

Marketing Outsources is the UK’s first specialist organisation, which offers both in company management with external creative and production services to provide full executive resources and a planned programme of activity. Implemented at a substantially lower cost yet with an improved performance, making the most of technology and better planning and faster working.

With Marketing Outsources you get a topflight director just when you need the strategy and creative direction with board level input to overall company growth, backed with experienced marketing managers.

Marketing Outsources can deliver and implement your marketing strategy through a group of expert and experienced suppliers, embracing the benefits of new technology, whilst balancing online and offline spending to optimum effect.

Value of Using Multi-Page Booklets in a Small Business During Tough Economic Times

This is the third in a series of articles on the design and use of print media for value added marketing and advertising during tough economic times. The goal of this article is the same. Use print media for marketing and promotion during tough economic times. It provides the best value for your marketing dollars. Our specific marketing goal is increase the spending base of existing customers and attract new customers.

This article deals with multi-page booklets. They are probably one of the most expensive of the printed promotional tools, but depending on what your business offers, can be one of the most value added. Multi-page booklets can be used as menus in a restaurant, menus in a salon and spa, product catalogs, multi-page brochures and more. When your business needs to convey a lot of information about products or services in a professional and classy style, the multi-page booklet may be your answer.

Dimensions and Paper- There are variations, but the standard dimension are typically 8″ x 9″, 8.5″ x 11″ and 8.5 x 5.5″. Most standard run printers offer booklets ranging from 4 to 32 pages. Printers specializing in catalogs and magazines offer more pages, but that is out of the realm of we are discussing today. scored and folded in the center. Booklets typically are printed on 100lb Gloss Book Paper and come with or without UV coating. Variations in the type of paper and finish will likely cost more. Order quantities range from 100 to many 1,000. The more you buy, the better the value.

Design/Message – As mentioned earlier, the multi-page booklet is the choice for conveying high quantity, high quality, classy offerings. When using the higher cost multi page booklet approach, ensure you know what message you want to convey and how you want to convey it. If your business pays several hundred dollars for booklets and you decide after the fact they were not what you wanted, our value proposition just went out the window. The basic rule of thumb when using them are:

o best for businesses that have many products, each with detailed descriptions that need to presented in an organized, easily read manner.

o best for businesses that are providing a variety of services with complicated descriptions.

o make sure the design and message coincides with the theme, decor and branding of your business.

o As with other printed materials, keep it simple and easy to read. Flowing hard to read fonts in titles and text, tend to lose readers. Make it as easy as possible for your prospective client, but make it look good. Again, design and message is where a good graphics artist is a must.

Uses – we mentioned some uses earlier, but we will go into a little more detail in this area.

Your business includes internet sales of 15 to 18 health and beauty products. Using an 8 page multi-page booklet as a catalog describing the products, manufacturer, availability, ingredients and pricing may be ideal. A catalog can be shipped with some or all orders and provides quick information concerning your other available products.
Your business is a salon and spa that offers hair care, skin care and massage services. Using a 4 page booklet as your menu of services may be your solution. With your graphic artist’s help, you can convey detailed information about services, training and certifications your business has, pricing and present it all in a classy style that coordinates with the decor of your salon and spa.
Your business is a small neighborhood ethnic restaurant that specializes preparing in-house and take-out the way the customer wants it. Your solution may be a 8 page booklet as your menu. The menu would describe your standard meals and pricing along with the specialty items available for the made to order dishes with pricing. This menu would be given to first time customers as a reward for coming in. They can take it home and determine what there next eat-in or take out will be beforehand.

Again, I am going to harp on branding. The most important thing to remember is to keep all of your promotional materials branded to your business for quick recognition. That means use the same logo, colors, fonts, and themes when developing your print marketing materials.

Corporate Business Gifts – Gift-Giving in Harsh Economic Times

In our day and age pretty much any business transaction can be done online. Whether you are purchasing a service or a product, the Internet has allowed us more choices and better deals. This is exactly what you get when you buy your corporate business gifts online.

The gesture of giving corporate business gifts is a classic tradition and a renowned way of saying thank you. With a corporate business gift you could be saying thank you to your customers, staff or boss and thanks to the boom in online business there is now more choice than ever when it comes to gaining corporate business gifts. Almost any gift that you can think of can be found on the Internet; even unique gifts. All of the gifts that are available can be customized to present your business name and logo as well as an original image that you have the option of supplying.

Below are examples of some of the most popular corporate business gifts that are available for you today:

· Pens

· Mugs

· Umbrellas

· Bags

· USB Products

· Mouse Mats

· Conference Folders

· Key Rings

Depending on who and how many people you are giving corporate business gifts to, you are able to order the above, and many more, in bulk or individual orders. You could want to say thank you to the customers of your business or, on the other hand, you may want to use corporate business gifts to thank your staff for their continued hard work. However, despite who you want to give a corporate business gift to, it is becoming increasing difficult due to the state of the economy.

The credit crunch and threat of recession is all too real and as a result you may find it difficult to afford the corporate business gifts you want to buy but don’t worry help is at hand.

Believe it or not there are companies out there who aren’t out to bleed you dry for your every last penny. Many of the companies who offer you corporate business gifts understand that to make money in these hard times they need to lower prices. Corporate business gifts may not be on the top of a priority list, which is why these companies are offering you some of the best deals around. In these cases you get the corporate business gift that you require and the companies supplying them don’t lose out on business.

To help you beat the credit crunch the companies who supply corporate business gifts have an array of offers that you can’t miss! If you are planning on buying corporate business pens then did you know you can buy a minimum of 500 for as little as 30 cents? How about coffee mugs? Well you can get a minimum quantity of 100 from $2! If Key Rings are more what you are after then how about a minimum of 100 from $3.50 or less. These prices are some of the lowest that you can find on the web, if you search around more, you will probably find much better deals. With a bit of web browsing you will find the corporate business gifts that you require at a price that is hardly going to break the bank.

Corporate business companies who offer prices such as the above will allow you to buy the perfect corporate business gift for your clients or staff; in fact at prices like those you could afford to buy all of your clients and staff corporate business gifts and still feel financially good about it.

An Insight Into the Emergence of Women-Owned Businesses As an Economic Force in India

1. Introduction

During the last two decades, Indian women have entered the field of entrepreneurship in greatly increasing numbers. With the emergence and growth of their businesses, they have contributed to the global economy and to their surrounding communities. The routes women have followed to take leadership roles in business are varied. Yet, most women business owners have overcome or worked to avoid obstacles and challenges in creating their businesses. The presence of women in the workplace driving small and entrepreneurial organizations creates a tremendous impact on employment and business environments.

Indian women business owners are changing the face of businesses of today, both literally and figuratively. The dynamic growth and expansion of women-owned businesses is one of the defining trends of the past decade, and all indications are that it will continue unabated. For more than a decade, the number of women-owned businesses have grown at one-and-a-half to two times the rate of all businesses. Even more important, the expansion in revenues and employment has far exceeded the growth in numbers.

The result of these trends is that women-owned businesses span the entire range of business life cycle and business success, whether the measuring stick is revenue, employment or longevity. This strengthens the view that all governmental programs and policies should target at strengthening women’s entrepreneurship in their native lands.

Although, many of the earlier obstacles to women’s business success have been removed, yet some still remain. This has initiated the scholars of entrepreneurship and small businesses to study the influences of and the impact on business ownership by women. The number of these research studies are growing steadily.

2. What Are The Characteristics Of Women Entrepreneurs In India?

Indian women of today have taken many strides towards business ownership. The broad classification of women business owners include women who establish, inherit, or acquire a business; women who start businesses with spouses or business partners but are either at the forefront or behind the scenes; and finally, women who start fast-growing or part-time or slow-growing firms. Although earlier researches on women entrepreneurs have suggested that significant differences existed between female and male entrepreneurs. However, more recent studies have shown that there are far more similarities than differences between women and men entrepreneurs in terms of psychological and demographic characteristics. The dominant predictors of success in case of women entrepreneurs are work experience and years of self-employment.

Generally, women view their businesses as a cooperative network of relationships rather than as a distinct profit-generating entity. This network extends beyond the business into the entrepreneur’s relationships with her family and the community. Certain cross-cultural studies on women entrepreneurs have reported that their management styles emphasizes open communication and participative decision-making, and their business goals reflect a concern for the community in which the business operates.

The majority of women business owners operate enterprises in the service sectors, whereas the majority of male business owners operate enterprises in non service sectors, particularly manufacturing. Women are not only achieving economic independence and wealth creation for themselves, but through job creation, they are also providing opportunities for others, particularly for other women.

A series of researches have shown that the workforce of women-owned businesses tend to be more gender balanced than the workforce of men-owned businesses, although women business owners are more likely to hire women. Put simply, an investment in women’s entrepreneurship is an investment in the economic independence and well-being of all women.

In comparison to their women counterparts who established their businesses two decades earlier, women who have started their businesses sometime during the past decade are more likely to have the following:

o a higher level of education, previous professional and managerial experience, as well as executive level experience

o a greater appetite for capital, both credit and equity

o a strong motivation for autonomy and achievement

o a dynamic personality

o a passion for what they do

o creativity to innovate and implement

o independence and self reliance

o high self confidence

o willingness & ability to take risks

o alertness to opportunities

o ability to marshal resources

o ability to respond to market & environment signals

Thus, from the above discussion, we can conclude the following traits of personality of women entrepreneurs:

Risk taker Proactive Opportunist Visionary Inventor Tolerance of ambiguity Commercialiser Desire for independence Trader High energy Innovator Ability to bounce back Flexible Results oriented Need for achievement All rounder Internal control Decisive Self confident Self Motivated Pragmatic Flair

3. Why Do Indian Women Undertake Entrepreneurship?

In spite of the growing number of female entrepreneurs, the share of female entrepreneurs is still significantly low when compared to their participation rate. However, there are several factors responsible for increasing the level of female entrepreneurship in India:

1. Nature of Entrepreneurship: Women enter into entrepreneurial activity because regular employment does not provide them with the flexibility, control or challenge offered by business ownership.

2. Motivation : Several evidences suggest that women do not lack the motivation to enter into business ownership. They are often highly motivated than their male counterparts to overcome the barriers to business start-up.

3. Empowerment : Indian women are becoming more empowered now-a-days. Legislation is being progressively drafted to offer them more opportunities at various levels.

4. Social Conditions : Population growth results in a strong positive relationship on entrepreneurial activity. Across genders, the increase in demand and competition for jobs pushes more people into necessary entrepreneurship. For women, in particular, the relatively high involvement in necessary entrepreneurship indicates that self-employment is used as a way to circumvent institutional and cultural constraints with respect to female employment, as well as a way to provide supplemental family income.

5. Economic Conditions : Auspicious economic conditions favour the participation of women in entrepreneurial activity. The smaller amount of financial capital requirement and higher proportion of available bank loans positively correlates the level of female entrepreneurship to economic conditions. In fact, in a country like India, the relationship between the size of unofficial economy and entrepreneurial activity is positive.

6. Literacy & Education: Increased levels of education has played a crucial role in initiating the process of entrepreneurship. It is not only the illiterate that are starting the businesses but those with education & skills are also exploiting profit opportunities.

4. What Are The Needs Of Women Entrepreneurs In India?

1) More and better access to finance/credit is mentioned very frequently. Give a woman 1000 rupees and she can start a business. Give her another 1000 rupees and she will be able to feed not only for her family, but for her employees as well.

2) Access to business support and information, including better integration of business services.

3) Training on business issues and related issues

4) Better access to local and foreign markets.

5) Day care centres & nurseries for children, and also for the elderly;

6) Positive image-building and change in mentality amongst women, whereby women see themselves as capable achievers and build up confidence.

7) Breaking through traditional patrons and structures that inhibit women’s advancement.

8) Role modelling of women in non-traditional business sectors to break through traditional views on men’s and women’s sectors.

9) More involvement and participation in legislation and decision-making processes.

10) Removing of any legislation which impedes women’s free engagement.

11) Awareness-raising at the governmental as well as private level to truly and really create entrepreneurial opportunities and not just programs that stay on paper.

5. Which Important Problems Are Faced By Women Entrepreneurs In India?

1. Women hardly interact with other women who are successful entrepreneurs. This results in a negative impact on their networking skills.

2. The areas, where one can see women acting as entrepreneurs, is in the very typical women’s sectors of 3Ps. This is also the area, where women are accepted in society to be experts in and thus have the capacity for entrepreneurial activities.

3. It is clear, that women have the responsibility of getting children and taking care of them. Very few societies accept fathers taking over the role of staying home and taking care of the children. Once these children are old enough to take care for themselves, they have to bear an additional responsibility of taking care of elder parents. If they want to become entrepreneurs, the society expects them to be able to do both: take care of family and home and do business.

4. Women are very critical when it comes to themselves – can I really do this, am I good enough, maybe I have to learn more, others can do it better. It is quite interesting that many successful women have been educated in only girls colleges and schools, which often deliver a safe environment to try out ones personal strengths, learn to overcome weaknesses and be proud of oneself.

5. Discrimination – it is hard to believe but women are still treated differently in our society. Women do get lower salaries compared to men doing the same job, women do not have access to men dominated networks who take their decisions about successors in the company during golf plays or sauna meetings….

6. Missing networks – through centuries business men have build up their networks but women still have to learn to catch up.

7. A lot of women tell stories about not being taken serious by bankers, when they wanted to get a loan for their business. Often enough, they have to bring their husbands or fathers to be able to be heard and receive financing. So, the domination of men in the banking world is a problem.

6. What Are The Challenges Faced By Women Entrepreneurs In India?

One of the major obstacles faced by women entrepreneurs has been that they are not taken seriously. Even though women have achieved credibility as competent entrepreneurs in areas such as retail, personal services and business services, perceptions that women-owned businesses are less successful, credit worthy & innovative continues to be a barrier.

Besides this, there are several other challenges being faced by Women Entrepreneurs:

1. Lack of Visibility as Strategic Leaders: Changing the perceptions about the likely success of women-owned businesses depends on increasing women’s visibility in leadership positions within the greater business community. In an assessment of women’s presence as CEOs or Directors of large business enterprises, it has been anticipated that the exodus of women to entrepreneurial growth firms might be because women believe that have greater representation in strategic leadership positions in privately-held or family-owned firms as they provide better opportunities for leadership than available to women in publicly-traded companies.

2. Differential Information and Assistance Needs: Another significant need of many women business owners is obtaining the appropriate assistance and information needed to take the business to the next level of growth. In a study conducted to gather information needs of women entrepreneurs, those who were just starting their ventures, requested assistance and training in implementing the business idea, identifying initial sources of financing, and advertising/promotion. The entrepreneurs who were already established, had a somewhat different set of needs including financing for expansion and increasing sales. Another conducted study had identified ten most desired needs of fast growth entrepreneurs:

(a) using cash flow to make operational decisions

(b) financing growth

(c) increasing the value of the business

(d) compensation for self and associates

(e) hiring, training and motivating for growth

(f) succeeding in a rapidly changing world

(g) successful selling

(h) sales force management

(i) management success

(j) problems and pitfalls of growth.

Unfortunately, this differences in information and assistance needs can be found across cultures as well.

3. Family Influences on Women Entrepreneurs : The overlapping of the family and the firm is not significant for women business owners. Unfortunately, little research has been conducted on the dynamics of family-owned firms headed by women. As the boundaries between the firm and the family tend to be indistinct, women operating family businesses face a unique set of issues related to personal identity, role conflict, loyalties, family relationships, and attitudes towards authority. Additionally, family businesses owned by women are at a disadvantage financially and are forced to rely on internal resources of funding rather than outside sources. The critical role of family in business, also emerges in cross-cultural studies which show a women relying heavily on the family for start-up capital.

7. What Steps Need To Be Initiated For Women Entrepreneurial Development In India?

A possible set of three inter-linked and inter-dependent clusters of recommendations can be aimed at “pushing” a larger number of women entrepreneurs towards growth opportunities, unlocking their potential as creators of wealth and jobs, and providing a more conducive legal and regulatory framework. These recommendations can also ensure the proper positioning of “pull mechanisms” to enable the growth-oriented women entrepreneurs to expand and grow in terms of investments, markets and profits.

1. Prioritizing and Pushing at the micro-level : There is a large and seemingly ever-increasing number of women entrepreneurs operating in micro-enterprises and in the informal economy. They can be facilitated to grow into sustainable, formally registered & large enterprises with the help of following actions:-

o Conducting gender analysis for all entrepreneurial support programmes

o Gathering data on women and men entrepreneurs

o Applying “target group segmentation” to women entrepreneurs

o Using targeted approaches for priority categories in order to provide additional “push” to women entrepreneurs to the next level of growth

o Promoting mobilization and organization of representative associations

o Examining differential impacts of governmental policies, programmes and actions

o Promoting development of demand-led supports for women entrepreneurs

o Promoting more flexible and innovative financial products by banks

2. Unlocking and Unfettering Institutional Framework: Policies, laws and overall regulatory environment are frequently seen as barriers and disincentives to expansion and growth. However, they need to be promoted in such a way that women entrepreneurs see the advantages of and benefits that come with compliance.

o Reviewing impact of existing and new instruments on women entrepreneurs

o Identifying those instruments that act as barriers to expansion and growth

o Modifying or dismantling these instruments

o Taking account of the social and cultural contexts affecting policy implementation and redress inequalities and abnormalities

o Making use of IT and associations so as to minimize the administrative burdens on women entrepreneurs

o Holding regular consultations with key factors like women entrepreneurs, women entrepreneurs’ associations, financial institutions, etc, to review progress and identify new bottlenecks.

3. Projecting and Pulling to Grow and Support the Winners : The first two sets of recommendations are aimed at trying to “push” more women entrepreneurs into growth situations as well as ensuring that laws & regulations do not stand in their way. The third possible recommendation relates to facilitating and “pulling” the women entrepreneurs into situations where they can actively pursue growth strategies.

o Providing incentives for expansion and growth after removing barriers and disincentives

o Encouraging and rewarding dynamic representative associations of women entrepreneurs

o Promoting strong links and synergies with existing major economic players

o Profiling the economic and social contributors among women entrepreneurs to the national economy

o Promoting and rewarding programmes that serve women entrepreneurs

o Making full use of data gathered to inform new policies, programmes and supportive actions

o Ensuring synergies between (a) women related ministry (b) economic ministry (c) welfare & social development ministry in the government.

8. Conclusion

With relevant education, work experience, improving economic conditions and financial opportunities, more women around the world are creating and sustaining successful business ventures. This will not only have an impact on the economies of the countries in which women own their businesses but also will change the status of women in those societies. It is likely that, as we begin this millennium, this will be the century of the entrepreneur in general and of the women entrepreneur in particular.