According to the United States Bureau of Labor Statistics (BLS), nonfarm, private sector employment peaked at 115.8 million in December 2007 then fell to 109.5 million by May 2009. At this time, job losses from mass layoffs added up to 3.6 million, up 66% over the preceding 18 months. The loss of over 6 million net jobs is a huge problem for the U.S. This jobs decline is just in the U.S., yet in December alone, Brazil lost 654,000 jobs. In fact, on a single day in January, almost 80,000 jobs were lost or put under threat in the United Kingdom, Europe, and U.S.

When considering where the new jobs will come from, remember that there are two kinds of small businesses: those without employees (or non-employer businesses), and those with paid employees (or employer businesses). The U.S. Small Business Office of Advocacy estimates that in 2008 there were 23.1 million non-employer and 6.1 million employer businesses.

When the economy struggles, the number of non-employers tends to increase at higher rates, while the number of employer businesses stagnates or declines. Going into business for themselves (becoming non-employers) has been a lifesaver for an additional 1.7 million individuals and their families.

However since most of these non-employers work only part time, we are most interested in employer firms. In the aftermath of the 1991 downturn, firms with 20-499 employees led employment expansion, while the smaller- and larger-size businesses struggled. During the 2001 downturn, larger firms (500 or more employees) experienced the greatest net employment losses, followed by firms with 20-499 employees. The smallest firms, with fewer than 20 employees, weathered that storm better than the others.

Expect small- and medium-size businesses and the services that support them to lead the economic recovery worldwide.”

For more information, visit www.hermangroup.com. Archived editions are posted at http://www.hermangroup.com/archive.html

“Strong customer relationships are built on integrity: Never promise anything you can’t deliver. But when you see an opportunity to over-deliver, do it every time.”

It’s a short couple of sentences but a powerful concept that goes a long way toward creatingfiercely loyal customers. Chris Nickas, advertising manager for Mega Group USA, mentioned the concept of “lagniappe,” a Cajun term meaning “giving more than what’s required with no expectation of anything in return,” in an article three years ago, about a New Orleans butcher who always gave customers an extra ounce or two in every pound of ground beef sold. At this year’s GIE+EXPO Dealer Experience, Ariens Co. President Dan Ariens mentioned the importance of dealers going above and beyond the call of duty as a way to maintain customer loyalty during tough economic conditions.

I cut the sentence from the article for space reasons, since it wasn’t a specific “low-cost marketing technique,” but really it’s one of the oldest in the business world: earning a reputation as a dealership that provides more value, more service, and gives the customer the most for his or her money. This in turn creates positive word-of-mouth referrals from loyal customers—what many will agree is the most effective marketing technique of all.

Again, the book providing the excerpts is “Changing the Channel: 12 Easy Ways to Make Millions for Your Business,” by Michael Masterson and MaryEllen Tribby (Wiley, October 2008, ISBN: 978-0-470-37502-0, $24.95) Call 800-225-5945. In Canada, call 800-567-4797.

But it was Anderson who truly drove the point home during his technical session that the brave new world of ethanol blended fuel and a renewable fuels marketplace demands a group of experts to help consumers through the transition as smoothly as possible—and no one is better positioned than lawn and garden power equipment dealers to take on that role and add value to their position in the marketplace.

Things like promoting fuel stabilizers since homeowners don’t use as much fuel and tend to store it longer. Things like asking customers to bring in their fuel containers for testing for the presence of ethanol and even water in fuel. Fuel system cleaning, carb tuning and cleanup—these are the little things that dealers can do that customers will never hear about in the box stores.

Look for more than a few dealers to offer “Ethanol Tuneups” or “New Fuel Service Specials” to ensure customers’ small engine products run smoothly as ethanol-blended gasoline is introduced into chain saw, trimmer and mower engines. “The kinds of things we used to do with fuel and fuel storage, we just can’t do anymore,” said Anderson during his technical presentation. “The fuel has changed, and we have to recognize that and act accordingly.”

The photo came from the big box of old Chain Saw Age (forerunner to PET) archives, which includes some classic material. The photo has a “MCulloch Corp. Public Relations Dept.” stamp on it, and a hand-written note from I believe former CSA editor Ken Morrison: “Rarest of all—Mac BP-1—a saw ahead of its time in ’62. Was pulled off the market—now extremely rare. Had a balance piston below regular piston, which made it smooth and added ram effect to fuel transfer charge.” Greco’s note agreed, calling the saw “quite an innovation, but a little too much for the industry at the time.” Ironically, the 1962 PR copy also on the back of the photo mentions none of this, but instead promotes the saw’s “portability” and usefulness for outdoorsmen.

Speaking of outdoorsmen, I love the gear the two guys in the photo have: from their old-school hats and checkered shirts to the lack of gloves when handling chain saws and firewood, the military-style Enfield carbine and long-barrel pump shotgun leaning against the wood pile a couple of feet from the saw tip (always smart)—and to top it off, though it was mostly cropped from the version that ran in November—a Chevy Corvair in the background. There’s nothing like a Corvair and a McCulloch BP-1 when you’re going hunting, fishing and firewood collecting. And don’t forget to leave your gloves at home!

A couple of weeks ago, the cynical journalist in me was calling the recent price drops “election gas,” the thinking being that the powers that be didn’t want a bunch of Americans PO’d about gas prices heading out to vote. Of course, the recent development comes on the heels of the great Southeast “hurricane spike” two months ago, when prices here locally at poweretblog headquarters shot up 50 cents a gallon in one afternoon with Hurricane Ike bearing down on the Gulf Coast, resulting in shuttered pump islands and serious scarcity problems in the region for several weeks. The hurricane spike came on the heels of the great “Asian demand” spike from late winter through mid-summer, coupled with the traditional Memorial Day “travel season ” spike in gas prices that Americans have come to know and love over the decades.

I thought we’d never see $2 a gallon again, but then who ever thought they’d see Wall Street investment bankers on welfare, or a black U.S. President?

But let’s not stop now: The last time I paid less than a dollar a gallon was in 1999 at an independent station near Atlanta, and if you want to talk serious milestones, then let’s shoot the for 60-70 cents a gallon I remember paying when I turned 16 in 1978. But for now let’s happily sniff the fumes during a long fill-up—and don’t worry about those three drops that hit pavement every time everyone gets gas and moves the nozzle from vehicle back to pump. It’s Buck Ninety-Nine Day!

The chosen product in this case is the Yamaha Rhino, a popular utility vehicle that sold 42,000 units in 2007. Seems accidents involving the Rhino have added up to 30 deaths and more than 200 state and federal lawsuits, according to the article. Voluntary federal safety regulations for ATVs are going mandatory next year, but UTVs, with their steering wheels and more automotive designs, have largely escaped safety regulations.

According to the Consumer Product Safety Commission, ATV-related injuries have increased 37% from 2001-2007, with 150,900 serious injuries requiring emergency room care in 2007, and 107 children under 16 killed on ATVs in 2007. Now, following legislation passed by Congress and backed by the Specialty Vehicle Institute of America, formerly voluntary ATV safety standards are becoming mandatory in 2009. Standards cover brakes, drive train controls, maximum and speed limiting devices for youth ATVs, performance requirements for brakes and stability and manuals, labels and hang tags.

Interestingly, the article has a comments from a CPSC staff member noting that one reason UTVs have so far escaped regulatory attention is the nomenclature used: UV, UTV, ORV, etc., making it tough to keep track of incidents. “We’re always running behind trying to figure out what’s the word to search for,” said one staffer.

Actually, I drove past my polling place at a municipal library here in Montgomery this morning and flipped out at the long line stretching out the door, through the parking lot and around the building and just drove on by—and this was five minutes before the polls opened! At work, looking at some of the news coverage online, where people were waiting hours and hours just to vote, I was tempted to take the election off. (I live in an older neighborhood and voting precinct near the core of town that’s been solidly Republican ever since LBJ shattered the Southern Democratic Coalition in the 1960s, so it’s tempting at times not to exercise the right to vote.) Yet then I think of soldiers and statesmen, civil rights activists and volunteers of all political stripes who’ve given their time, careers and lives to ensure this constitutional right extends to all citizens—not to mention the little old ladies and others who are waiting hours in all sorts of weather—and I got off my duff, took an early lunch and breezed into the library before 11 a.m. After the pre-work early voters and before the lunch crowd, the only line at the polling place was at the ballot insert machine, and I was third from the front.

I got my “I Voted” sticker, felt like a better American and thought briefly of heading to Starbucks for a free cup of coffee, but instead went home, whipped up a homemade burrito and was back at work soon after noon.

Like they say, if you don’t use your right to vote, you have no right to complain.

How to Make Dealerships Strong—and Happy

By M. ERIC JOHNSON and ROBERT J. BATT

Manufacturers and their dealerships all too often become victims of their own success.

The manufacturers add new outlets to fuel growth, which can lead to too many dealers competing for the same customers. The weak dealers see their sales and profits drop, and the strong see growth stall. In rocky times, this is bad news for everyone.

The way out of this downward spiral is not, as many manufacturers believe, to cut costs, offer sales incentives or add even more dealers. Such steps may boost results in the short term, but quickly lead to erosion of dealer profits and long-term sales.

The answer is to strengthen manufacturer-dealer relationships.

Companies can pull out of downturns, strengthen their competitive advantage and position themselves for growth with three simple steps that we have identified through three years of interviews and field research:

• Make the dealers feel needed (which may require) Eliminating those with the weakest results
• Enhance support for those that remain Developing products that help them maximize profits and eliminate competitors
• Go out of your way to incorporate them into your company’s culture and mission

Companies as diverse as piano and power-tool makers have succeeded using such strategies. Here’s a look at how they did it.

Strengthen the Best

In 1985, Steinway & Sons was in a crisis. Sales were slowing and its 150 dealers were complaining about low profit margins, slow-moving inventory and the costs of supplying concert grand pianos for Steinway performers. Bruce Stevens, the newly hired president and chief executive, spent six months visiting dealers and listening. The result was a new dealer-relationship plan in which weaker dealers were cut off, while those that remained were offered expanded, exclusive territories and profit opportunities in exchange for their stepped-up commitment to display and promote Steinway products.

Dealers initially were reluctant to invest in upgrading showrooms, increasing inventory and adding salespeople. But as they saw Steinway making good on its promises of expanded territories, they signed on.

Steinway, a unit of Steinway Musical Instruments Inc., Waltham, Mass., today has 63 dealerships in the U.S. Sales and margins for both Steinway and the dealers have increased.

“It takes trained people, good displays, a lot of inventory and strong programs to present Steinway pianos to consumers in a way that is consistent with our image and heritage,” says Mr. Stevens, who retired at the end of 2007. “And that requires profitable retailers. Take away the profit and we don’t get the representation in the field we need.”

Consolidation is not the only way to show dealers that they matter. Stihl Inc., a producer of chain saws and other gasoline-powered tools, makes its dealers feel needed by spurning major home-improvement chains and selling exclusively through its network of 8,000 independent tool and hardware stores. The company, which requires its dealers to go through sales and service training, believes that motivated and well-trained dealers are important to help customers understand the performance benefits of Stihl products — and to justify the premium price. Some of its products sell at a $50 to $100 premium. Stihl, the U.S. unit of Germany’s Andreas Stihl AG Co. KG, has enjoyed double-digit growth for 15 consecutive years…

Source: The Wall Street Journal: Read The Full Article Here

—Dr. Johnson is a professor at Dartmouth College’s Tuck School of Business in Hanover, N.H., and director of Tuck’s Center for Digital Strategies. Mr. Batt is a Ph.D. student at the Wharton School, University of Pennsylvania, in Philadelphia. They can be reached at reports@wsj.com

A natural-born promoter and marketer, C.B. says dealers can’t just “sit around and wait for the money to come in—you’ve got to have a gimmick.”

(First, a disclaimer: We do a lot of different work here at H-B (PET’s publishing company), and many times I’m busy with one of my other assignments for our timber magazines—lost in an Oregon sawmill or trying to remember operating conditions on a logging job in central Idaho or south Alabama. Many times I just can’t take a call, though I do my dead-level best to (eventually) respond to all reader inquiries. A lot of times it’s a consultant (or even a Fortune 500 company) wanting trend-type information about the industry—or perhaps an information shortcut for free on a project that’s being billed for thousands to a client on the other end. Yet at the same time, I pride myself as being the editor most likely to take the weird calls, odd requests and comments from readers and clueless Google searchers who’ve come across our publications. Many times a call about “picking my brain” sends a red flag up my spine—but there’s just as many times that I’ll take the call and delve into the unknown if only to add spice and variety to the workday.)

Yet I knew I had made the right call to take the call from Robby West, who operates Acreage Mobile Small Engine in West Palm, when he told me he was just trying to “stay out from behind the Ryobi 8-ball” when it comes to mass merchant service work. West operates Acreage Mobile Small Engine, an at-home mower and small engine equipment service business. He had recently branched out and gotten his contractor’s license to perform complete home standby generator sales and installations and was doing well, he said.

The standby generator work is proving a natural outgrowth and growing part of his service business, West said. We talked a bit about the industry, and his thoughts on doing mass merchant service work. (As little as possible, he said, having been burned behind the proverbial 8-ball one to many times.) He wondered whether more expansion was the way he should go. Good Lord don’t put that on me, I said, and related two independent business truisms that I’ve learned after working with a half-dozen trade publications for the past 20 years:

Any supplier or major customer outlet that encourages you to take on more work/inventory/trade area as a big new opportunity is ultimately doing so in their interest, not yours, even though you may have a great relationship, know the guys personally, etc.

Any great situation you work out as an independent business person, where your business has found a new product, market, process, etc., will not last. Oh, it may last two weeks, two months or two or 10 years, but ultimately you will be forced to change, because that’s the nature of business, competition, changing markets, etc.

These two rules are good to remember. Anyone have any other small business or lawn and garden truisms? (And “No rain, mo’ pain” doesn’t really count)