Is it alive? Entrepreneurs see marketing as the voltage needed to resuscitate businesses

Americans have only to look to their own dwindling buying and borrowing power these days to recognize the domino effect that the banking crisis, collapsed stock market and shocked economy are having on their lives.

For small-business entrepreneurs in creative industries, the situation has become a scary kind of laboratory, where they must experiment with parts of their operations to see what will best help them and their enterprises to survive. In the Cleveland area, two owners of quite different arts/artisan businesses are finding that marketing may be the juice that keeps their companies running.

Photographer Roger Mastroianni, whose well-established studio works with national firms and many arts organizations, including the Cleveland Orchestra, said he plans to rework his website and launch a stronger marketing campaign to try to make up for business lost to clients’ budget cutbacks.

“What’s happened, for instance: The Cleveland Play House is not using me anymore, because they can’t afford to pay me,” Mastroianni said Wednesday. “They’re using a free intern, instead.”

   Cleveland Play House production of “My Fair Lady”           

Photo by Roger Mastroianni 

Doing it better. During an economic downtown, many people regard arts as nonessentials. But, he pointed out, photography is not a budgetary priority in times like these even among arts organizations.

That’s a grim reality for Mastroianni, who derives nearly 40 percent of his business from arts clients. Yet he does anticipate one improving vital sign: Just as he needs to increase his marketing efforts, so, he hopes, will other enterprises, meaning more advertising-related photo assignments for him.

In the meantime, the Mastroianni plans to “do what I’ve done in the past, better.”

His fellow Cleveland entrepreneur, Michael Feigenbaum, won’t compromise the quality and type of work he does either, but he’s willing to tinker with practically everything else.

Feigenbaum, a highly credentialed culinary artist who owns and runs the storied Cleveland bakery, Lucy’s Sweet Surrender, has tried all kinds of creative strategies to overcome what’s happening to his business in its changing Buckeye Road neighborhood. Once a bustling community, a stronghold of the Hungarian-American culture reflected in Lucy’s Sweet Surrender strudels and European cakes, Buckeye long ago lost most of its middle-class population to the suburbs and sank into poverty.

The bakery had been a Cleveland institution for decades when Feigenbaum bought it in 1994. People were still driving in from the outskirts for the delectable treats they remembered from their childhoods and the neighborhood eventually showed signs of revitalization as other business pioneers moved in. Feigenbaum even opened bakeries in other Cleveland locations. Then Sept. 11, 2001, dawned.

“After 9/11, things really did change a lot,” Feigenbaum recalled. Expenses climbed, including rents; he had to close his other shops. 

He didn’t give up, though. After Lucy’s was featured on the Food Channel, Feigenbaum started a website and began shipping baked goods out of town. He developed a market among local coffee houses, supplying them with fresh pastries. He has a presence at local farmers’ markets, works with the wedding trade as a cake supplier and even opened a cafe recently in another struggling Cleveland neighborhood where a budding arts district promised clientele.

Stretching his market reach. But for all his courage and creativity, it hasn’t been enough. With Cleveland the epicenter of the foreclosure crisis and the national economy tanking, many neighborhoods that had been teetering on the edge of renaissance have fallen back into a moribund state of abandoned, shabby homes and closed businesses, including coffee houses that had been Feigenbaum’s clients. The buyer for one of his closed locations went bankrupt, leaving the baker with debt to pay off.

He and his wife can’t afford to hire another baker; they do the work themselves and so can turn out only so much product to ship. Meanwhile, his walk-in traffic has become limited to bursts of sales at Hannukah and Christmas, Passover and Easter, with little in between.

“Gas stations sell more baked goods than bakeries” do now, he said ruefully. The factory-produced stuff doesn’t taste anything like his strudels, which he concocts from real eggs and butter and flour, but it can be made much more cheaply and mass-shipped to thousands of retailers.

So Feigenbaum, 54, is in danger of having to close Lucy’s, nearly the only business left open on its stretch of Buckeye Road. “Until this catastrophic downturn, I’ve been fine, [but] I can’t keep getting up at 3 in the morning forever,” he said. Plus, Lucy’s is going to need remodeling soon: “It’s a building built in the ’20s with equipment from the ’60s. I’m reaching this difficult point.”

This would be a sad story, indeed, except that, in the almost same breath, Feigenbaum began ticking off the many things he still has working for him. Though the cost of a real marketing campaign is beyond him financially, he’s been getting attention in the local media and his website draws people happy to discover how easy it is to navigate, he said. He’s recently started a blog to increase his market reach. And Lucy’s delivers locally, an important selling point with the many Clevelanders who still hanker for nut rolls, dobos torte and Russian tea biscuits.

The irrepressible Feigenbaum even sees a silver lining to the economy’s dark clouds: “Funny for me, the business is going to do better in these times … because we’re a very inexpensive luxury.”

Even the recession-stressed like cream-cheese pastries.

What do people want?

It’s a poser at any time, but for entrepreneurs looking to profit by answering a need or satisying a desire, the question has never been more urgent or baffling than right now. Business experts have started acknowledging that the economic recovery everyone’s hoping for will be extra slow to come because we’re all cutting back drastically on purchases in order to weather the recession. 

So what can you sell when no one’s buying? 

Well, entrepreneurs are not creative for nothing. They come up with great ideas all the time. But this scenario will challenge even the most imaginative.

I’ve been trying to analyze what’s going on in order to boost my own business, so maybe if we walk through the mental process together, we’ll identify some useful trends, if not specific products and services.

First and most obviously, big luxuries are out for the overwhelming majority of average consumers. So selling some kind of necessity is our best bet. But what counts as a necessity in a global population of so many different tastes, backgrounds, occupations and problems?

Food, of course – but not fancy food. Basic clothing, housing, fuel, transportation, medical care and supplies, education and job training. Certain kinds of equipment, such as computers, home-maintenance items, kitchen stuff (since we’re not eating out). Insurance. Legal help.

Those are things people need and must get somehow. Businesses that provide them will probably survive this slump. But that still doesn’t answer our question. In a time of great uneasiness and growing hardship, what do people want? 

Money, most of all. Jobs. Investments that regain their value. Not that too many entities are capable of providing that stuff right now, but if any could, what would having those things give people? Peace, security, confidence, optimism, comfort – right? 

Emotions. States of mind. Hmmm. If we can’t offer the actual means of achieving security and comfort, maybe we can offer something that makes people at least feel a little better. Inexpensive treats or reassurances of some kind.

Okay, not sweets and junk foods. There’s way too much of that trash available already. And I don’t know about you, but I would never sell tobacco products, booze or similarly addictive stuff that ends up damaging and killing so many people. So ix-nay on the ice-vays. We want to soothe and comfort, not enslave. 

How about access to information, markets, guidance, solutions? When people feel helpless, nothing cheers them up more than discovering they have the power to find answers and take the right steps.

How about groups? We all feel safer and better when we have a group to belong and talk to – a club, support organization, religious center, online community or neighborhood gathering spot where we can believe we’re not alone in our troubles, especially if we don’t have family to rely on. 

How about stories? During the Great Depression, lots of people managed to scrape together a nickel or two for a movie now and then, especially for glamorous, lighthearted escapes from reality such as Fred Astaire and Ginger Rogers flicks.  Books, music, dancing, drawings and interesting objects – the arts in general – brighten people up, too.

 And what about light and warmth? After all, it’s winter in half the world, and cold, dark days make the economy and life seem even crueler and more dangerous than they would in lush summertime.

Maybe some entrepreneurs out there (you? I?) will come up with new, creative, inexpensive products from these categories that revitalize people’s crushed spirits so magically they prove irresistible. And maybe if buyers feel helped, comforted and reassured, confidence and hope will return. 

Talk about doing well by doing good ….

Where’s the help for small businesses?

Well, I took a few days off, but the country’s economic implosion didn’t. In my post-holiday look at the news, I’ve found that some other people are upset about the same thing that’s been infuriating me: Though the U.S. depends heavily on the jobs and commerce generated by small businesses, small-business entrepreneurs and owners get next-to-no help from anyone with money – not governments, not venture capitalists, not business-development organizations – not even in this age of bailouts. 

As Simona Covel of the Wall Street Journal wrote Friday:

 ”For many small businesses across the country, these are scary times. The dramatic pullback in consumer spending is only the latest blow threatening to push some strapped small businesses out of existence. Customers are paying their bills late, cutting off cash flow, the lifeblood of a small business. Even healthy companies are being choked by the lack of credit lines and bank loans. Others are still reeling from several years of high raw-materials prices.

“In a recent survey from the National Federation of Independent Business, more than a quarter of small business owners said the current economic downturn is threatening their ability to survive. Nearly half of respondents said slow or lost sales are their most immediate problem.

“In the months ahead, ‘we are going to see small businesses that were marginal go out of business,’ says William Dunkelberg, NFIB’s chief economist. ‘We’ve never seen sales trends as weak.’

“Small businesses are a driver of the U.S. economy. In the past decade, small businesses — those with fewer than 500 employees — have created 60% to 80% of the nation’s net new jobs each year, according to the Small Business Administration. More than half of Americans are employed by a small business, and these companies are responsible for more than half of the nation’s nonfarm private gross domestic product.”

I have to ask: Does it make sense to anybody that even in better economic times, community and state business resources go almost exclusively to luring and nurturing big technology ventures? And that since times have gotten really bad, all the help is going to the giant corporations that messed things up in the first pace?  

Where are the investments in the diversified array of smaller companies that every economy needs? Haven’t we learned anything from all the factory towns that have collapsed because the one big employer pulled out or went bankrupt? Why are our government development efforts and venture foundations and angel investors putting all their eggs in the tech-manufacturing basket? Even the greenest portfolio manager would recognize that as a dumb move.

Maybe it’s time we small-business owners demanded smarter and fairer investment strategies from our cities, states and nation.

As Covel’s story notes, ”Many are frustrated that Washington is bailing out some of the largest companies and banks. ‘Our members are angry that the federal government is giving taxpayer money to big companies that have been horribly irresponsible while small businesses are not getting the money they need to keep their doors open,’ Margot Dorfman, chief executive of the U.S. Women’s Chamber of Commerce, told the House Small Business Committee earlier this year. The government should set aside money specifically to assist small businesses, she said.”

The small-business community needs to speak up now – and not just owners, but anyone who works for or buys from a small business. We all need to remind our mayors and council members and state representatives and governors as well as our national leaders that small businesses are a big part of our nation’s economic survival and future.

Imagine how many small businesses and jobs that $150 billion AIG bailout would have supported. Now pick up the phone and call your elected leaders.

That’s the spirit

This season is supposed to be about something more meaningful than money-grubbing. 

But if idle hands are the devil’s workshop, then busy hands must be Santa’s Workshop, because there’s almost nothing good or important I can think of about the holidays that isn’t essentially entrepreneurial in spirit.

Being motivated by love. Fulfilling the needs of others. Determinedly following a star. Having faith and hope despite the odds. Lighting a candle in the darkness.  Resolving to improve ourselves and the world. 

Lofty stuff, that. And yet we all carry out such concepts in practical and homely ways, as entrepreneurs do, making good products (gifts, cookies, a cheerfully decorated room) that people desire (because of the caring they represent and the enjoyment they bring) and for which we’re paid (in smiles and friendship).

It’s our holiday business and it requires imagination, planning, clear goals and hard work. Family and friends are the company, literally and figuratively, and teamwork is required for good results. There are even labor issues – have you tried getting your kids to help? - and, of course, costs, both material and psychological. 

But failure can’t be an option. So on this day before the day before Christmas, at the intersection of three holidays about the things we hope for and celebrate in ourselves and in our future, I wish all of you love, health, peace, joy and the kind of success that will make, not just your own, but all lives richer in the best of ways.

Technology kills

Except for transportation and e-mail, I’m not at all sure that technology is saving us any time.

Everything is a do-it-yourself situation now, from filling your tank to activating your credit card to setting up software processes. And every task requires you to master – or wearily ignore, at your peril – a crushing number of complex facts, steps, legal and financial details.

We’re now spending at least as much time trying to figure out the terms and conditions of online access to our own bank accounts as we used to eat up milking cows, carding wool and making our own soap.  I’d bet we’re all on hold for longer each year than it used to take to raise our own cotton, clean and comb the bolls, spin thread, weave our own cloth and sew clothes from it.  

Everyone talks about the ease of accessing everything online, as if you didn’t have to suddenly earn  doctorates in website function and commercial contracts just to apply for electronic ad-payment services.

Ease? That’s bitterly funny bull. For an entrepreneur like me, it’s the most discouraging thing imaginable to know you have to find your way through this unfathomable tech hell alone in order to perform tasks that used to be fairly straightforward and accompanied by friendly, in-person guidance from neighborhood experts. 

The situation is going to backfire on the economy.  (As if our economy needed any more damage). The time loss, the microscopic complications, the bewilderment, terror and frustration, the mistakes and the enormous stress entrepreneurs suffer in trying to cope with technologized versions of standard tasks will eventually stop them from even thinking about creating businesses.  

Entrepreneurs have to be technologically up to date in order to compete. Yet many of us can’t afford to hire expert help and we either can’t get through to, or comprehend, the “help” provided online or by phone-accessed tech support. So we spend hours and hours trying to accomplish computer tasks that could, and use to, be done much more efficiently another way. 

These processes must be simplified and clarified or more and more start-ups are going to fail and people will lose all desire to be entrepreneurs. Starting an enterprise will become like running for U.S. president – a job that’s gotten so expensive, so physically grinding and so psychologically torturous that the few people attracted to it anymore tend to be rich and dangerous head cases. The chances of a mentally healthy person with good ideas signing up for that get closer to nil all the time. 

That’s why, if even simple businesses continue to turn into forbidden zones of frightening technological mystery controlled by a specialized class of abstruse and remote gatekeepers called IT experts, initiative  and creativity are going to die. People may still start out hand-making and hawking great pound cakes or T-shirts door to door, but if they’re at all successful, pretty soon they’ll have to cope with the dark universe of online processes just to get their sales-tax filed and their supplies ordered. They’ll end up on the phone navigating automated systems six hours a day.

And then they’ll decide that it’s easier to clean cotton bolls for a living.

Coping with QuickBooks or … not

I know they teach things such as basic accounting and inventory management in business school. I also know that thousands of entrepreneurs who never learned these things in school have created their own businesses and done just fine. 

But I can’t for the life of me imagine how. I’ve spent the last few hours trying to get familiar with QuickBooks and its online business-management software and, already, my eyes have practically rolled back into my head. Though the designers have clearly tried to make it simple, there are too many alien terms and way too many options for someone like me who just wants to do a few very – very – basic things.

It’s like getting a new cell phone or any other electronic gadget with all kinds of dippy features on it that I can’t even identify, much less make work, and didn’t want in the first place. Some people really enjoy exploring and playing with all the complicated little magic tricks. I don’t . I just want whatever it is to do the one thing I want it to do, and do it right now, without breaking down or demanding that I choose from 50 subsidiary functions and then freezing up if I click or punch in the wrong option  … or much worse, deleting the work I’ve already done or signing me up for an unwanted e-mail account or making the page I’m on disappear and giving me no clue why it happened or how to get it back.  If I were a smashing sort of person, there’d be a ring of silicon and metallic rubble around me the size of Saturn’s.

I think for most of us, PCs and ATMs and DVD players and pre-programmed microwave ovens simply represent a whole new quadrillion ways the world can go flooey and totally mess up our lives. Bad enough to have your last seven-grain bagel combust. Petrifying to have the same thing happen electronically to your financial records. 

Help screens are little use - they almost never seem to address the precise disaster I’m experiencing. What I need is a human tutor who can explain in English – not technologese – which services or functions I need and how to set them up and then sit there, phone-ready to rescue me, when I inevitably screw up. 

Fortunately, one has volunteered and boy, is he in for hours of thickwitted questions, endlessly repeated instructions and serial panic attacks (mine and maybe his own, too). Maybe he’ll teach me how I can e-mail him a perfectly toasted seven-grain bagel to say thanks.

The nightmare before Halloween

I’m writing this on what we who grew up in Northern New Jersey always called Mischief Night – the evening before Halloween, when the juvenile delinquents and probably a few dubious adults would rampage through neighborhoods with toilet paper, eggs and salt, often doing real damage to people’s property.

No one with any sense went out on Mischief Night – or let their cars or lawn furniture stay out, either.  

By the time we were all costumed for trick-or-treating on Halloween, most of the parents had already spent long daylight hours seething and swearing – scrubbing dried yolk off the siding, digging up patches of salt-burned grass and reporting the occasional blown-up mailbox to the police. When it grew dark, they took giggling, shrieking packs of us from door to door, holding our hands, guiding us with flashlights and making sure no one’s bag developed a tragic, candy-leaking hole. Halloween was fun-scary, safe.

But the grown-ups couldn’t shield us from Mischief Night. We absorbed their worry - a frightening sense of unpredicability and lawlessness was in the air. Vandals were about. Our homes felt threatened. We knew there’d be trouble somewhere, maybe for us.

It’s been Mischief Night in America for a long time now. There’s egg to clean off our faces from having allowed the Bush Administration and its favored high-rollers to dismantle the safeguards and flout the processes protecting all of us from financial, environmental and military-industrial rapine. Salt’s been plowed into the ground, killing or stunting everything we need to keep healthy, from our incomes and climate to our international alliances.  

Though their spree is ending, they set off a last big cherry bomb for us in the milk box. Take a look:  It’s a lot more terrifying than a ghost. And we who are the grown-ups now – the thinkers, the doers, the earners and the voters – must respond to it by being entrepreneurial about more than our businesses and careers. We have to be entrepreneurial about our nation and the world.

Why? Because we have to do better than simply pull down the toilet paper and repair the damage. We have to make sure the delinquents never get another chance to damage things in the first place. So it’s going to be up to those of us with imagination and enterprise – and aren’t you one? - to invent new policies and strategies, new and better ways of creating wealth that encourage people to do their best, rather than their worst, and reward them when they do. 

It’s like the difference between clear-cutting old-growth forest and sustainably farming trees. Or between selling people risky mortgages and investing in neighborhood revitalization.

Too many people want to get rich doing what’s cheap, fast, easy or sexy, no matter how disastrous the consequences. We have to help people understand that there’s just as much money to be made from creative services and products that save our dying environment and build happy, flourishing lives, families and communities.

We have to make this the last Mischief Night we’ll ever need to call by that name.

Angels, earn your wings

Why is reality never like the movies?

Specifically, why is it so for hard for an entrepreneur like me to get an angel when George Bailey didn’t even have to ask?  From what I remember of “It’s a Wonderful Life”, all George had to be was suicidally frustrated and hopeless and presto! He found a kindly silver-haired guy talking him off the bridge and making his life seem worthwhile again. 

I think could work myself down to that level of despair. Of course, I’d want my angel to show up with a big check made out to The Genius Group LLC, along with the usual store of life-affirming wisdom. 

Anyone?

Anyone?

I’m not hearing any bells.

I keep hoping that my state or local government will finally create a program that connects entrepreneurs like me with angel investors. There was even a story about angels in the online New York Times yesterday saying that a report by the National Governors’ Association Center for Best Practices finds that state officials are working to develop more ways to help entrepreneurs find private investors. I quote:

“Among other strategies, this includes creating seminars on private equity investment, connecting entrepreneurs with existing educational opportunities, forming statewide angel networks, and appointing angel investors to state economic advisory boards, the report said.” 

I got a excited for a nanosecond, until I saw the rest of the story:

“Angel investing in entrepreneurial ventures can range anywhere from $5,000 to $100,000, with investors typically backing new medical devices, software, biotechnology, business services, IT and energy initiatives.”

Rats. Rats and mice with cheese on top. That’s why I keep saying “an entrepreneur like me” – I’m not in new medical devices, software, biotechnology, business services, IT and energy initiatives. I’m in new media, wanting to inform the public about all those technological innovations and many other kinds of creative developments. And so my state officials in Ohio (oops, did I name the place?), along with the other set of 49, apparently couldn’t care less whether my business and other nonbiotech, non-IT companies fulfill their great potential or not.

Guess we’re going to have to keep trying to do it for ourselves, huh? Boo! Happy Halloween!

It’s scary out there. Will I ever find someone(s) with the imagination, vision and enthusiasm to materially join me in this great quest to change how the world perceives and practices creativity? To revolutionize human problem-solving and change our societies into peaceful, constructive cultures?

Does anybody here see what I see? (Let’s count how many shows I reference today. That was “1776.” Title, not tally.)  

Anybody? Nnnnnot yet, apparently.

Ok, so – Here’s a guide I found online to help those of us on whose lines of business the venture people and programs spit. There are probably more, but this is a start. And remember: There’s no money anywhere right now except for the eight hours every third day when stockholders have taken their puppy uppers. But we can be prepared with strategies for when the money comes back, Little Sheba. Or bahk. Or ba-a-a-ak.  We hope.

And for those of you who were counting, the correct answer is six.

A darned good day

Yes, I know there don’t seem to be many of these, but I can’t believe that I’m some kind of entrepreneurial head case. I bet there’s a whole lot of suffering and angst going on in the start-up community all the time.

It’s just that I’m probably one of the few talking about it. Business people in general don’t seem to like to let on what a tough time they’re having. Stiff upper lip, go-get-em attitude and all that. Very northern European. But I talk about it because I think it’s important for people – especially fellow entrepreneurs - to realize that starting a business or any creative project can be just plain hard and depleting. That it’s normal to feel crushed a lot. That they’re not alone. 

We have to learn to cope with all the bad days.

AND we have to learn to enjoy the heck out of the great ones, when they come along. It’s only fair. We keep having to make lemonade all the time, so when life gives us pure dark Belgian chocolate, we deserve to revel in it.  

I felt like I was handed two boxes of bonbons yesterday because I got several big free-lance assignments (we entrepreneurs have to eat while building the biz ….) and especially because I signed up two terrific new bloggers for the Geniocity.com site. I’ll reveal more about them in the next week or so. 

It was fabulous.

So for a few hours – maybe a whole 24 (!) – I’m going to bask in the sense of relief and elation suffusing my sore psyche and let a few of my nerve endings romp therapeutically in the metaphorical Godivas and use a generous number of extremely large words just because I want to.

Good day and ganache to everyone.             

Yum

In and under the financial wagons

Investors had a big ol’ hootenanny at the end of last week. And when they finally woke up Monday, they had a collective hangover that looked a lot like the onset of clinical depression.

On Friday, they thought the cavalry had arrived to save them and all those sorry, overextended,  who-cares-make-hay hucksters who took over the banking and loan industries while the government winked and held the doors open. They saw charging horses and flashing weapons and cheered their own salvation with a whooping, hollering orgy of piling back into the wagons they’d just crawled under … only to realize when the dust cleared that it was merely George W. Custer in a cowboy hat, waving his fountain pen at the head of a tattered, debt-ridden regiment of federal spendthrifts.  

And even though they – and we – would like to believe that a couple of signatures can give this movie a happy ending, deep down we know that this is likely no summertime Hollywood western (“Buckaroo Bailout” ?), but a long, grim, anguishing Bergman flick the likes of “Autumn Sonata.”

When the economy tanks, entrepreneurs are often the ones sucked under with it, as a story in the small-business section of Monday’s New York Times points out. It figures: We’re smaller, with fewer clients or customers, fewer resources. Some are already facing reality, closing or selling their enterprises and going back to corporate life. It’s not a guarantee of safety, but at least the paychecks there are steadier and usually come with health insurance.

How do you know when it’s time to fold? When you’re out of money? Or when you’re out of hope? I’m a first-time entrepreneur and have no answer, but I can guess that the need to eat has a way of dissolving dreams quickly. Still, as long as the whole world doesn’t collapse, some of us will keep going, biding our time and winterizing our little companies so they’ll survive the coming harsh season somehow, while we take on second jobs.

Could the cavalry have a real leader in its ranks? Or will we have to hold out until one appears out of our own midst? I have no idea. But the real entrepreneurs among us may start raising chickens inside that circle of wagons.