The market-oriented economy of the United States of America is the largest and most technologically powerful in the world. With technological predominance over the years, there has been a gradual development towards a ‘two-tier labor market’ wherein those at the bottom do not have the requisite education and/or relevant professional or technical skills as those at the top. Hence, those in the former category remain deprived of a comparable rise in pay rate, health insurance coverage and other such benefits. Since 1975, practically all gains have gone to the top 20% of households.

The Iraq war in 2003 and the rising prices of oil between 2005 and 2008 have drained the national resources extensively. Other issues like inadequate investment in economic infrastructure, rising medical and pensions costs for an aging population , trade and budget deficits, and stagnation of family income for low income groups have further stunted economic growth. Of course, the mortgage crisis, the failure of big financial institutions and credit rating agencies are also being looked into.

Loss of jobs led to defaults on home loan repayments. Thus, unemployment and homelessness have been the two major fallouts of the present financial crisis that have adversely affected the lives of millions of Americans. Unemployment peaked at 10.2 % in October 2009. In May 2010, it was at 9.7 % with 15 million unemployed. The recent improvement in employment is largely due to large scale temporary hiring by the government to conduct the 2010 Census. Private Sector hiring has barely changed.

Factories are producing more but prices are falling. The manufacturing-led recovery is not generating inflation. This should help in further growth. Rebuilding their inventories, meeting increasing overseas demand and investing in new equipments is keeping the manufacturing sector in the driver’s seat in this phase of recovery. Manufacturers employed 29,000 workers in May. Working hours have increased and overtime hours are at their highest in two years. Increase in global demand for agricultural commodities, housing and infrastructure is also helping facilitate the rebound in the manufacturing sector. It is the domestic home-construction sector that remains unimpressive. April saw work begin on 672,000 houses and this was down to 648,000 in May. The deadline for tax credit for first-time home buyers ended in June and this will further cool sales and construction in the latter half of this year.

In the U.S., market analysts are projecting 2010 to end with a 9.7 % unemployment rate with a significant drop to 8 % by 2011.

In the United Kingdom, the number of people claiming Jobseeker’s Allowance (JSA) decreased by 30,900 between April and May 2010 to 1.49 million. It is for the first time that the claimant count has come down below 1.5 million since March 2009. The number of vacancies between March and May, 2010, has increased by 7,000 to 492,000.

Japan recorded a 5.10 % unemployment rate in April 2010 after peaking at 5.6 % in July 2009. Even though layoffs are not happening, employers are still reluctant to hire afresh.

Germany seems to be driving the European economy and is set to expand by 3-4 % this quarter. Positive trends have been forecasted for employment as well as consumer spending and manufacturing, according to Wall Street Journal. Unemployment fell by 45,000 in May,2010, with the unemployment rate down to 7.7 %, lowest since December 2008. There were 3.24 million Germans unemployed in May 2010. Experts do warn against exposure of German banks to debt-ridden Euro countries like Greece, Portugal and Ireland.

Fiscal and financial responsibility is the need of the hour across the board. Ben Bernanke, the central bank chief of USA said, “Minimizing the risk of future financial crisis will require tougher prudential standards for financial firms, especially systemically important financial firms, as well as more intensive supervision”.

The National Federation of Independent Business (NFIB) came out with a Small Business Optimism report as recently as in mid-April. Its chief economist, Bill Dunkelberg, said in an accompanying written statement, “Something isn’t sitting well with small business owners. He attributed it to “poor sales and uncertainty” that “continue to overwhelm any other good news about the economy.”

Everyone agrees with the trend towards recovery, but small business owners are extra cautious and rightly so. The recovery is treading ever so haltingly that even a die-hard optimist must surely be wondering as to when he will experience its impact on his own business. Around 950 business owners were surveyed by NFIB. They acknowledge that job cuts have slowed and a few businesses do plan to hire in the next three months. But sales are still weak, credit is hard to find and, not surprisingly, capital expenditure is abysmally low. The general sentiment is not optimistic for the near future.

Hence, businesses which generate jobs are still leaning towards freelance or part-time help as they would rather cut costs. So, while job cuts are tapering off, fresh hiring is not yet on their minds. Caution is in the air. This wariness has rubbed off on the credit markets too. While large and small community lending entities want to lend more to small businesses, they are wary in identifying qualified borrowers. Thus, business owners are finding it increasingly difficult to meet the even more stringent guidelines for securing loans for their businesses.

True, not many pink slips are being handed out. But there is a huge backlog of those millions of jobs lost. The job market has prompted many to become self-employed. Small business owners need the confidence that extra staff will contribute to their bottom line.

Will Draper, a veterinarian of ten years with an entrepreneurial spirit, opened his first veterinary office in 2001. He soon began to expand, opening several more offices over the short span of just 6 years. In 2007, Draper envisioned a state of-the-art animal hospital with an emergency room involving three times the space. After speaking to many lenders, he opted for Live Oaks for their no-nonsense approach and because he was impressed with their knowledge of vets. He then learnt they were into niche lending to veterinarians only! He got a Small Business Administration-backed loan.
Soon, his business grew 40% and in the process of keeping pace with it, his expenses mounted. He needed to hire more people. He called Live Oaks again. They agreed to help him again before the problem got out of hand. He got the loan with free coaching on how to work the payroll and other expenses. They even guided him on how to avoid his mistakes in future. Said Draper, “They never made me feel bad about approaching them again, but instead made me feel that they really want me to successful.”

The CEO of Live Oaks says this is their competitive advantage in wooing borrowers. Business has doubled for them and they have hired in a period when others were laying off staff! They are a 100% ahead of their projections.

I know such real-life stories are rare and far between in these hard times. Let’s hope to ‘multiplicate’ them, if I may be allowed to coin a new word!

In the year 1994, subprime mortgages amounted to 5% of the total mortgages. By 2005, this figure had shot up to 20%. In 2006, 22% of all subprime loan payments in arrears of 60 days or more occurred in Jackson, Mississippi; while Detroit, Boston and California figured at 24.6%, 15% and 14% respectively.
Previously, it was the commercial banks that offered mortgages at fixed rates only. With changes brought about in the banking system, mortgage finance companies and mortgage brokers were now competing with the traditional banks.

The consumer was offered loan repayment options at low interest rates for a longer period of time with the actual prices of property having shot up. Thus the consumer now had more choices to get his mortgage serviced. Subprime loans took care of defaults on payments resulting in an even longer repayment span.

It was in 2005 that interest rates started to inch up again after a long spell of stability. Consequently, there was a gradual slowdown in demand for new homes. It was then that the prices of houses also started coming down. Mortgage defaulters were increasing. Home owners with subprime mortgages were neither able to deal with increase in payments nor were they able to sell their homes at their previous value. As home values and prices had dwindled rapidly, homeowners had difficulty selling at a price that would cover their mortgages. In California, the houses were overvalued by as much as 77%.

The total mortgage debt outstanding was $12,063,864 million in 2005. This went up to $14,607,840 million in the fourth quarter of 2008. With federal government aid, this figure had edged down to $14,287,340 in the fourth quarter of 2009.

This has resulted in homelessness of Americans on a massive scale. Approximately 170,000 families needed shelter in 2009, up from 159,000 in 2008, according to an annual survey by the Department of Housing and Urban Development. Forty-two percent of the homeless were on the streets in 2008. In 2009, twenty-nine percent of adults were staying with relatives. $1.5 billion of stimulus money has been allotted for the homelessness prevention program. Short and medium-term rental assistance (ranging from 3 to 18 months) will be provided to individuals and families. These funds will also be allocated for utility deposits, utility payments, moving-cost assistance and hotel vouchers.

An estimated 2.5 million foreclosures were completed between 2007 and 2009. Another 5.7 million foreclosures seem unavoidable, given that mortgages have become too expensive. The Home Affordable Modification Program modifies the loans but beyond that, those who do not get support by the Federal Government are expected to default again within 12 months. These customers are increasingly burdened by credit card debt, auto loans and other expenses. Re-default rates are expected to go up from 40% to 60 % on modified mortgages. People are being advised to opt for short sale over foreclosures and thereby avail of the cash incentive. As many as 7 million houses are vacant and not currently for sale. The inventory must be cleared before the industry rebounds. Further complicating matters, the costs of new homes may increase due to restrictions imposed by the Environment Protection Agency, tightening requirements for builders to better handle storm-water runoff. The National Association of Home Builders is soon expected to enact these regulations.

First-time buyers accounted for nearly half of the homes purchased in April, 2010. This is attributed to historically low mortgage rates and lenient lending standards. The head of the Federal Housing Administration, David Stevens, calls this “a market purely on life support” and in addition, lending is expected to tighten. Also, the European debt crisis could compel a hike in prime lending rates of banks. So even if the mortgage rates currently remain low, a number of factors may shape the future of the American housing market. Unemployment trends will also contribute towards how the real estate industry rebounds in the immediate future.

The uncertainty is not going to end in a hurry.

Small Business is a rich Resource of Innovation and Employment generation in the United States. A marvelous combination, indeed!

Fair Winds Are Blowing, too!

Yes, entrepreneurship is on the rise in America. According to a report released by the Kauffman Foundation, 558,000 new businesses were created each month in the year 2009. This being the highest statistic in the last 14 years, it reflects a 4% increase over the year 2008. Entrepreneurial America is learning to cope on its own steam in a country severely hit by recession.

The recession has converted job seekers into self-employed entrepreneurs overnight. Adverse circumstances do create entrepreneurial opportunities. Low-end retailers, dollar stores, locally-made products, the green movement, education and preventive health care are a few industry segments which are generating entrepreneurial opportunities today.

The Small Business Administration’s Office of Advocacy states that there are an estimated 29.6 million small businesses in the United States. They employ over half of the country’s private workforce, 40% of which are high tech workers like scientists, engineers, computer workers. This includes the 52% home-based businesses and 2% franchises. They generate a majority of the innovations that come from the United States companies.

USA emerged with the 7th highest Total Entrepreneurial Activity rate (TEA) among 31 countries surveyed in 2003, according to the Global Entrepreneurship Monitor (GEM), a unique large scale long-term project developed jointly by Babson College and London Business School and funded by the Ewing Marion Kauffman foundation. USA had the highest TEA among G7 countries. Americans who opted to start a new business as an opportunity to better their financial condition totaled 9.1%, while only 1.7% of Americans chose to become entrepreneurs due to lack of alternative employment opportunities.
According to the GEM report, entrepreneurs helped expand existing markets by increasing competitiveness and market efficiency. In other cases, they enabled new and unique products or services to be introduced in the markets. No doubt, innovative entrepreneurs have contributed substantially towards the nation’s economic growth.

The buy-local campaign, a voluntary initiative of the American people, has generated mass support for small business owners in the ongoing financial crisis. On the other hand, the government is seeking an increase of $ 2 billion in funds for the Federal Export-Import Bank (EXIM) within the next five years, totaling $ 6 billion. This is meant to facilitate lending to small-to-medium sized businesses, in an effort to help spur their exports. The government hopes to see a 40 % increase in these exports by 2015. The government is looking towards the expanding economies of China, India and Brazil in hopes that businesses there will begin to import technologies from America. While the US already has an agreement in place from its EXIM bank counterpart in India, it is seeking partnership with the EXIM bank of the larger economy of China for this purpose as well.

Time and tide seems to be turning in favor of the SMB sector. This certainly comes after a long spell of hardships and uncertainties. Avail the services of FINTEL, a web-based financial services company, to harness this tide in your favor. FINTEL has worked with the Ewing Marion Kauffman Foundation to develop the largest and most reliable financial database of privately held companies. Our financial data and the analytical tools they power are relied upon by various economic and entrepreneurship researchers, business coaches, Small Business Development Centers and Financial Institutions. FINTEL continues to develop analytical modules for its benchmarking systems. Among the company’s research clients and partners are the Small Business Administration, the Brookings Institution, Advanced Research Technologies Inc. and several other private and public enterprises.

The US financial system is the largest, most advanced and one of the most open in the world. Foreign financial entities are allowed a level playing field alongside domestic financial institutions as long as they abide by the US regulations after gaining prior approval. Customers are free to deal with any financial institution they choose and may negotiate at will.

Perhaps this sounds a bit too utopian, considering the American financial system has taken a severe beating. This has raised a great deal of concern. Christopher Dodd, chairman of the Senate Banking Committee, due to retire next year, is making his second attempt in a new plan to plug loopholes in financial regulation to prevent a repeat of the crisis of 2008. However, his first attempt last year was aborted by his Senate colleagues. The American Bankers Association claims that the new plan imposes too much regulation, while the consumer groups say it imposes too little. So while the new plan also faces criticism, the sense of urgency to pass the reforms is palpable all around us. Dodd’s bill aims to clarify the regulatory apparatus, making the Federal Reserve responsible for bank holding companies with assets exceeding $50 billion and for policing the entire financial system for risk. The Fed would also house a new consumer financial protection bureau.

The Securities and Exchange Committee has recently charged Goldman Sachs, the blue-eyed boy of Wall Street, with betting aggressively against the nation’s housing market. There are opinions for and against the allegations that are pressing the senior-most executives of the beleaguered company. However, the fact that the financial industry operated in a lightly regulated world is what disturbs those affected by the economic collapse. Nonetheless, Goldman’s profile had steadily risen over the past two years. The firm was propped up with taxpayer dollars in the fall of 2008, enjoyed a windfall from the collapse of insurer AIG and was poised to pay large bonuses to its employees for last fiscal year. However, the company’s shares have plummeted as a result of the recent allegations.

Financial Institutions such as banks, lenders, credit unions, and insurance companies directly affect a country’s economy. When problems arise in this sector, the economy-at-large becomes unstable and uncertain, here at home and internationally. But with problems come innumerable opportunities. Just as individual businesses seek to manage risk by improving liquidity and profitability to ensure stability, so shall financial institutions. Financial regulation, however, needs to ensure that the financial sector doesn’t have the incentive to make risky bets that may ultimately become toxic debts. It has become a game of risk for high return, forecasting which debts will become toxic, and selling the risk off before they actualize. These toxic debts have increased to such a degree that the economy suffered the resulting downfall. Now, lending institutions that traditionally extend finance to small businesses have become extremely conservative.

At a time when confidence in American financial institutions is wearing thin, their contribution to the economy cannot be ignored. Financial institutions that service the middle and small business sectors with commercial loans have a crucial contribution to make. However, identifying low-risk customers, minimizing exposure to bad loans and effectively pricing the risk of each applicant is a challenging and an exhaustive exercise.

Toxic debts are to be avoided, yet traditional methods of evaluating loan risks have not been entirely reliable. Struggling or growing businesses remain in need of additional capital, yet lenders and business owners aren’t entirely confident they know what loan amount is serviceable before a business experiences major cash shortages. Creditors need to better delineate which loans will be serviceable, and business owners should know with certainty, how much lending their firm could sustain.
Likewise, a firm needs to ensure that its internal measurement of financial performance is measured against the larger industry standard, to uncover trends in effort to stay efficient, stable, and competitive. This is true whether it involves a lending institution which benchmarks its own performance against other financial institutions, or a company analyzing its own financial health in relation to its peers.

The truth of financial health remains embedded in the numbers. No matter which analytical methodology or financial tools are used, sound financial decisions should be a priority over extensive risk. Business owners should manage their own financial risk to avoid unserviceable debts, lending institutions need to better delineate safe from potentially toxic loans, and financial regulation needs to address the issues that arise from an unchecked system of risky bets, which ultimately lead to a toxic-debt shell game. Although our economy will continue to recover slowly, it will only maintain stability when a better balance has been achieved between financial regulation, the banking industry, and business leaders.

Rooted in academia, FINTEL is a financial services company equipped with the largest database of privately held companies, industry metric reports, financial tools and business intelligence solutions that a financial institution can draw upon to service its clients. Offering a solution to commercial lenders and business owners alike, our financial tools help address the needs of thorough analysis of financial performance and loan serviceability. Privacy of information of all clients is ensured. Visit our site www.fintel.us for more information.

It was for the first time after six years that the US economy was trending positive for a non-stop 8-week period. The dream run was cut short in mid-April. Personal spending rose continuously for six months until March, according to a Government report released on the 3rd of May 2010. This came in part due to a rise in personal income, from 0.3% or $32.3 billion in April after a 0.1% rise in the previous month.

Personal savings were at 2.7% in March, down from 3.5% in February. This was the 3rd consecutive month in decline. This decline in part reflects the growing need to tap personal savings to accommodate declines in income due to job loss. Personal savings, retirement accounts, and home equity have been shrinking for many Americans due to the economic downturn and unemployment. What was once a nest egg for the future, is now a safety net in depletion for many. However, this decrease in personal savings also reflects an increase in spending. Shown by an increase in retail sales, this in turn is good for the economy and will eventually contribute to job creation. Exports however, grew by a marginal 5.8%, a marked decrease from the 22.8% growth rate in the last quarter of 2009.

The government data on 30th of April showed the U.S. gross domestic product, the broadest indicator of economic recovery, rose at a 3.2% annual rate in the first quarter of 2010. This was the third straight quarter of growth of the US economy. The economy grew at 5.6% in the last quarter of 2009. The annualized rate of economic growth takes the stretch over a three-month period and projects what it would be over a 12-month period.

Various job reports released by the government also reflected that the scenario may finally be improving. The private sector hired people for the third successive month in April with an addition of 32,000 jobs. The nation as a whole added 262,000 jobs in April and this did not include the census workers hired by the government. But yes, the unemployment rate still holds at 9.7%. Medium sized businesses added an estimated 17,000 jobs and large enterprises added 14,000. Small business contributed with another 1,000 jobs, a sector grappling with problems in accessing the much-needed credit to grow coupled with the regulations of healthcare and related costs. Employers are still slow to hire while they look to expand. And although the nation’s planned job cuts were the lowest in April in nearly four years, the government has trimmed 14,973 jobs during the same month.

True, the recovery is slow. “Companies have cut to the bone, cutting off arms and legs. Now they are shifting from defense to offense,” said John Canally, an economist for LPL Financial.
Yet there has been an increase in economic activity, supported by legislative push by way of incentives to employers for job creation. The service sector and the manufacturing sector have reported gains for the quarter ending in April but there was a drop in the goods-producing sector and the construction industry.

Truckers, railroads and other transportation companies are seeing better business after a gap of four years. This sector falters a good 6-12 months ahead of a broad recession and, similarly, sees a recovery ahead by the same margin of 6-12 months. The stocks are already doing well. Truckers, shippers and global delivery firms are all picking up barring the airlines which are grappling with a different set of problems. FedEx and UPS are riding high on the back of volcanic ash.

A clear positive trend is reflecting in the broader economy. But the average American would like to see more hiring before agreeing with the cautious optimism of the economists. Even when the economy and job market finally stabilizes, many Americans will be starting to save for their future all over. But before that happens, a delicate orchestration of events has to unfold within the complexity of the American and global economic system.

The U.S. Small Business Administration (SBA)’s flagship lending program has processed more than twice as many loans in the last quarter than it did in the period a year ago. 16,558 loans were passed versus 8,205 in the previous year.

The SBA spokesman, Jonathan Swain, stated “These are dollars that are going in the hands of small businesses that are not only saving jobs but also creating jobs.” While job creation remains the main focus for President Obama, he acknowledges that it is the private sector which can create jobs and that there is only so much help the federal government can provide. Of course, there are many factors involved in economic recovery. The SBA’s lending program is surely assisting small businesses, but to which degree it contributes to job growth is not entirely certain. Nonetheless, the trends in hiring figures look promising.

The month of March has seen the highest hiring figures in the last three years. Against a forecasted gain of 184,000 jobs, the Labor Department claimed the economy added 162,000 jobs. This happens to be the third successive month of job gains. No doubt, short-term factors have contributed to this positive trend. The Census Bureau has added 48,000 for the once-in-a-decade headcount of the US population. The severe winter storms had also contributed to the positive gains. Nonetheless, these figures compare positively to earlier figures, and afford some optimism for the foreseeable future.

Yes, the unemployment rate remained at a forecasted 9.7 % as expected. But amazingly, job growth has occurred across several, diverse sectors of the economy. It is said to be the best within the last four years, with 60% of industries having added jobs. Retailers added 15,000 jobs, leisure and hospitality increased by 22,000 jobs, and manufacturing contributed with 17,000 of which 2,500 came from auto companies and their ancillaries. Of course, the duration of unemployment has been too long for many to endure, and many of the unemployed have stopped looking for jobs. They need to stay attuned to the changes. Calling it “a resilient recovery,” the managing director of Economic Cycle Research Institute, Lakshman Achuthan, stated “All these areas are stabilizing and moving forward. That’s the hallmark of a recovery.”

Manufacturing has grown for the eighth successive month in March since July, 2004. These strong numbers arise out of new orders and the rebound of production to maintain larger inventories. The Plastics and Rubber industry is the only manufacturing segment which has contracted. This sector has slipped on the employment front; one expects that trend will reverse as demand rises. This positive trend is currently being revealed in the United Kingdom and China, and hopefully soon, the United States as well.

FINTEL, a web based financial data company, has termed the trend of economic stabilization as positive and optimistic. FINTEL’s COO, Boris Nenide, suggests that “these trends will be revealed in our financial database of over a million individual companies that currently navigate through every stage of the economic crisis. For academic researchers, economic and business analysts alike, industry metrics remain an important tool for gaining insight into how these trends have affected financial performance of companies across 2,500 industry segments in our data.” Thus, future research may reveal to which degree federally-backed, lower-interest loans helped small businesses gain the working capital needed, not only to survive the economic storm, but to sustain job growth as well. The answers are still in the future, but hopefully they assure us all that the noble efforts of the SBA did, indeed, contribute to economic recovery and stability.

So, you have been running your business on your own steam for the last few years and you are dreaming bigger now. Business expansion plan is what is on your mind.
Does that mean more staff, more time at this juncture? Not necessarily.
Does that mean more information on product/service, funds, competition, etc and more funds? Certainly.
Here are a few basic tips that you would certainly need to expand upon. It will work as a trigger point that you can take off from.
Define your Business as it is today:
Before you venture further into your business expansion plan, you must have a formal report card of your present business: the Product, Market Position, Financial Health, laws and regulations, compliance, strengths, opportunities for growth, the challenges ahead.
Ensure that you have applied correct, effective and useful management tools for this purpose. There are key business metrics used to understand and gauge a business. These are very sophisticated indicators of the present health of your business. They help you and your business associates to gain insight into your business from a common perspective. This reduces the risk of difference of opinions on many crucial issues.
For this purpose, the data collated of your business must be accurate. Ensure you have the right technology, tools and staff for this purpose. An honest and comprehensive database of all aspects of your business is imperative. This is essential for building strategy and planning ahead.
Shape up your business expansion plan:
While the very idea of taking off on your next big venture is exciting, you know there are multiple challenges ahead. You must be absolutely sure that you are on secure ground before you even begin to execute your next big dream.
If you are expanding just to survive or to beat competition, then this is not a profit-oriented growth plan. This should be identified as a contingency business plan. Be honest with yourself for all the right reasons. The present economic shakedown should be an adequate lesson for all of us.
Well, since you are going ahead with your business expansion plan now, you need to prepare your project report. There is a plethora of software available to plan out and shape up your reports. All you need is accurate, comprehensive and concise information of the market, competitors, technologies and funds available, etc. The challenge here is to source dependable information that you can base your decisions upon. You can outsource this information from external bodies. Do not ever think that you will be able to collate all this information on your own in this time and age of information explosion. There are a few dependable organizations doing just this job for you, it is their business, after all. For instance, you might want to check out FINTEL for current and reliable financial information related to privately-held companies.
For any such business expansion plan, funds are the propellers. If your basic project report is accurate, you have won more than half the battle. And in these times of recession, while institutes are wary, they are also looking for business. It is here that your reputation and ethics come in handy. The challenge is to convey it to the person across that you are worth trusting. Simple, you should live your ethics day in and day out.
Good Luck !

Some of you may be thinking that what’s the need of using industry metrics – you know your business and you know how its performing. Competitors and industry peers have their own challenges, own disadvantages and advantages. So, they are bound to perform differently….

In a highly competitive environment, it is extremely important that a business develops a supply chain that gives it the lowest cost advantage, manages its working capital most effectively and fetches the best possible return on stakeholder investments. A business maybe doing well in one aspect but lagging behind in others. How can you find out the best way of doing things and managing finances? Simple, find out the best practices in your industry and try to emulate the ones that are likely to take your business to the next level.

Michael Porter, a leading authority on competitive strategy and international competitiveness, came out with Porter’s Five Force Analysis. As per Porter, two things determine your company’s profitability-the industry in which it competes and its strategic position in the industry. Some industries have inherently low profit potential while others are highly profitable. The most profitable companies have a strong competitive position in a highly profitable industry. The poorest companies have weak positions in weak industries.

As per this strategic management guru, Industry x Competitive Position = Profitability.

Little can, thus, be said about the importance of not just knowing your industry in terms of the manufacturing processes or raw materials but each of the non-financial and financial industry metrics that can tell you:

• Your industry’s past and present performance, and future outlook
• Your industry’s profitability and capital structure
• Your competitive position in the industry
• Your capabilities in terms of cost-competitiveness, revenue generation and growth
• Your performance in comparison to competitors and industry as a whole
• Areas of improvement in your current operations – financial management, supply chain, costing etc
• Industry best practices that have helped the key players in your industry to reach and retain that competitive position

But then why the focus on specifically on financial industry metrics? Companies like Motorola, GE and Toyota, who have been pioneering initiatives like Six Sigma, LEAN and Just in time inventory know the importance of financial metrics and this is highlighted in the fact that any process improvement, quality enhancement or supply chain optimization initiative is considered worthy by them only if it translates into increased profitability, whether by expanding the revenues or shrinking the costs. Financial performance, hence, is a tell-tale of the way the business is managed and stakeholder’s expectations met, and when a business focuses on improving its financial performance, it’ll dive deeper into causal problems that restrain profitability and come up with viable solutions.

At the same time, it can be a real challenge to find information about comparable firms of the same industry to benchmark against, especially for Privately Held Companies and Family Owned Businesses. FINTEL Industry Metrics offer unique and powerful insights into the financial profiles and performance of privately-held companies operating across almost all industries. The information is contemporary and reliable. Receive a comprehensive set of commonly used financial indicators derived using the full set of Income Statements and Balance Sheets of privately held companies, be able to distinguish between small, medium-size and large firms in a given industry and gain the FINANCIAL BUSINESS INTELLIGENCE required to take your business to next level!

Yes. The United States of America is still struggling to get out of the economic quagmire that it still finds itself in. All of us know that it is not going to be resolved in a hurry. We hope we have seen the worst and pray that things start getting better sooner than later.

Nonetheless, when I started off with my business venture, had I anticipated any adversities? Had I provided for contingencies? Was I too euphoric to even think wisely and sagely that unforeseen occurrences are part and parcel of not just personal, but professional life, too? It would have been extremely naïve of me to venture into a business without, at least, being mentally prepared for stormy days.

Today, when the American economy is in the doldrums, all businesses have not shut down, all have not resorted to handing out the pink slips. Those that survived and continued to do well were not all lady luck’s favorite children. So what were they good at? Or, better still, what is it that I am not good at? I dared not shy away from my shortcomings. Absolute honesty and forthrightness is required. If it was not me who was directly responsible, then was it my employee, or a business associate; was it the market, competition, customers or the economic policies of the government? If it was any of the issues other than me, even then I better take onus because at the end of the day, it is my business. Have I identified that sore point? Until and unless I do that, I am sinking deeper into trouble. The earlier I identify it, the better it will be. Only then will I be able to resolve it. And whether I like it or not, the result is a mirror in front of me. I am responsible. Government policy or not, I am the entrepreneur. The onus is on me. May I not use the economic crisis as an excuse!

Seek professional help if the situation so demands. Better that than wasting precious days trying to grapple with an unfamiliar problem. Seek help to identify the problem or to resolve the problem, as the case may be. FINTEL can be a great source of financial intelligence in both bad and good times, helping you determine your competitive position among industry peers as well as to identify potential pitfalls and challenges early.

Once the issue has been identified for what it is, you should be able to justify its nature. Do not camouflage the actual issue. You will be doing great injustice to your own self first and to all those associated with your business if you fail to be transparent in your efforts and actions. Have the customers disappeared? Why did they disappear? Was I short on cash? Why was I short on cash? Are my industry peers / competitors doing something differently to weather difficult periods? Why did I not anticipate problems? Did I have contingency plans in place to meet the credit crisis? If not, why again? This is not a blaming exercise. The purpose is to ensure that we are absolutely strict and disciplined with ourselves. If not now, then when? Further, the purpose is that in the future, I will be a seasoned entrepreneur who will be able to weather and survive any kind of a crisis/risk/contingency. No finger pointing will be required. Maybe I will write a book or better still an article for a business journal for posterity! Something useful that our younger generation may draw upon and learn from: our experience and wisdom.