3 Things You Should Know About Small Business: April 26
NEW YORK ( MainStreet) - What's happening in small business today?
1. Defining a "small business" needs to be resolved. A major reason why critics say the House-passed Small Business Tax Cut Act, H.R. 9, will die in the Senate is because of the definition the proposal puts on small businesses as any company with 500 employees or less. That means even companies worth billions of dollars, like hedge funds, for instance, have the opportunity to take advantage of the proposed tax benefit designed to help "small businesses."
Huffington Post contributor Lloyd Chapman says defining the size of a small business "is of critical importance to our national economy."
Chapman says using a 500-employee size standard as a small business "makes no sense," given that 98% of all U.S. firms have less than 100 employees.
"Arbitrarily using a 500-employee size standard would therefore grant thousands, if not millions of large businesses a 20% tax deduction and discourage firms just shy of the 500 employee threshold from making new hires," he writes. "This misguided piece of legislation therefore highlights the extremely important question -- how big is a small business?"
"If Congress were to establish policy that prevented publicly traded corporations and giant companies from receiving federal small business contracts and tax subsidies, our national economy would vastly improve," Chapman writes. "I would imagine that 99% of people in America would agree, that whatever Congress decides a small business is, Fortune 500 firms and multi-billion dollar investment firms should not be allowed to fit into that definition."
2. Viral marketing is imperative when trying to reach young consumers. Today's young consumers are a marketing challenge given their tendencies to switch between media options - the Internet, cellphones, TV and magazines - at a rapid pace. American Express (AXP) OPEN cited a recent study in which it found that the young generation switches media 27 times per hour compared to older counterparts who switch media 17 times per hour.
Figuring how and where to place marketing material becomes a challenge, but the solution is to create a model that engages young consumers on their terms, Amex OPEN contributor Dan Schawbel of Millennial Branding says.
A good case study for adapting its business in general to the younger generation is Bertucci's, the article says. The company has made physical changes to the restaurant, such as replacing booths with more open style dining to allow for greater socialization. It changed its menu to include smaller, cheaper options and has a YouTube series featuring the restaurant's executive head chef, Schawbel says.
The changes help spread "word-of-mouth interest," he says. "Viral marketing is still the most effective, especially with the advent of social networks."
3. Small businesses can take advantage of pop-up shops. Temporary pop-up stores have taken the retail sector by storm with everyone from West Elm to the NFL creating strategically placed stores. A pop-up store is named as such because it "springs up, exists for a short period of time, hopefully creates all sorts of buzz, and then disappears," according to Vistaprint's Micro Business Perspectives blog .