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Business Owners Say They’re Burning Out
A Walmart survey of business-owner burnout doesn’t seem to address how much of that burnout is caused by having to compete with Walmart or having to satisfy its buyers.
Here are today’s highlights:
Gene Marks says American startups are actually doing quite well.
Visa is going after small businesses for demanding credit-card surcharges.
Businesses continue to explore ways to use artificial intelligence.
First, Barnes & Noble put independent bookstores out of business; now it wants to be like them.
THE ENTREPRENEURIAL LIFE
Business owners say they are burning out: “According to a survey of small-business owners by Walmart Business, just 22 percent of owners felt they were taking enough vacation, with 41 percent saying they needed to be at work in order for their company to run. About 36 percent said they could not afford the cost of vacation, according to the survey. Ultimately, 36 percent said they took one or no vacations over the last two years, and 21 percent said they get time off just once a year. That lack of time away is leading to a sense of burnout. Seventy percent of the owners surveyed said they experience feelings of burnout at least once a month. About 27 percent said they experience burnout once a week or more.”
“If given an extra hour off of work, about 40 percent of the business owners surveyed said they would spend that time with their family. About 20 percent said they would check more items off their to-do list, while 15 percent would work out and 11 percent would meditate, according to the survey.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
A Mass-Extinction Event for Startups? This week, Gene Marks says the Silicon Valley notion that startups are threatened with extinction is ridiculous. In fact, new business openings have been surging. The real problem in Silicon Valley is the venture-backed business model that destroys more businesses than it creates. Plus: Gene also talks about a way for small businesses to help their employees get health insurance without having to actually offer health insurance. Gene also shares a lesson in regulation he learned from an eight-year-old entrepreneur.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Business owners continue to explore ways to use artificial intelligence: “Integrating AI tools into her team’s daily workflow has helped keep the workload manageable, says Lakesha Cole, founder of She PR, a public relations agency based in Tampa, Florida. Cole says she feels like she’s ‘added three new team members without the overhead.’ Here are four tips for incorporating AI tools into your small business’s operations — no prior experience required.”
“For AI-powered chatbots, she stresses the importance of learning prompts that are specific to your industry. If you’re not sure where to start, try searching online for prompt guides, suggests Joe Karasin, founder of digital marketing company Karasin PPC.”
“Consider the tasks that eat up the most time and whether AI can help streamline them. If you create content, for instance, you know that research sometimes takes longer than the writing itself does. Karasin estimates that he saves 15 to 20 hours per week using ChatGPT to find citations and resources for topics he writes about for clients.”
“Among other use cases, [Derek Pando, founder of Beeloo, an online business that creates printable activities for kids] treats AI chatbots as a marketing tool. They can take his business’s blog posts, which are written by a human, and help condense them into social media posts tailored to specific platforms, like Instagram and LinkedIn. They also suggest headlines that Pando can work with and tweak, which can be helpful in the midst of a creative rut.”
“‘I’ll say, Give me five different short posts that I can use for social media, or Summarize this into one paragraph,’ he says. ‘And so all of the labor that’s downstream from creating a core piece of content, we usually have the AI tools do the heavy lifting and give us lots of options and cut it down.’” READ MORE
That cool new independent bookstore is actually a Barnes & Noble that’s trying to look cool and independent: “No place better explains the improbable reinvention of the biggest American bookstore chain than the Barnes & Noble on the Upper West Side of Manhattan. That shop in one of the world’s greatest book markets has been a battleground since the day it opened three decades ago. It might be the most iconic of the chain’s 596 locations: It’s the store that helped inspire the mega-store run by Tom Hanks’s character in the classic romantic comedy ‘You’ve Got Mail.’ It also has been the site of a grand experiment for much of the past year. The chain invested millions of dollars to rebuild this Barnes & Noble into a model for its other stores to emulate as the company transforms into a bookseller for the modern age.”
“[CEO James Daunt’s] plan to save the company and its bookstores is to combine the power of a big chain with the pleasure of a beloved indie. By shifting control of the process to individual store managers across the country, Daunt is giving local booksellers permission to do things they were never able to do before.”
“They have discretion over purchasing, placement and even pricing. He wants Barnes & Noble locations to feel welcoming but not overwhelming—a chain store should be more inviting and less intimidating than a truly independent shop—and that means he needs the people who run them to make sensible decisions for their markets.” READ MORE
Stuck in a death spiral, local malls have plunged in value: “Crystal Mall’s parking lots used to be so crowded that parents would line up to drop off their teenagers near one of the entrances rather than search for a spot. Now, the vast stretches of cracked pavement surrounding this 1980s-era regional mall on Connecticut’s coast have more weeds than cars. Valued by an appraiser at $153 million as recently as 2012, Crystal Mall sold in June for just over $9.5 million in a foreclosure auction. ... Crystal Mall’s former owner, Simon Property Group, stopped making payments on $81 million in outstanding CMBS debt during the pandemic and last year handed back the keys to the property it had owned since 1999.”
“Older, low-end malls are worth at least 50 percent and in some cases more than 70 percent less than they were when mall valuations peaked in late 2016, said Vince Tibone, head of U.S. retail and industrial research for real-estate research firm Green Street.”
“Newer, well-located properties with strong tenant rosters are generating healthy foot traffic and returns for investors. But even these high-quality malls have declined in value by an estimated 50 percent since 2016.” READ MORE
Visa is going after small businesses for credit-card surcharges: “In recent months, Visa Inc. lowered the maximum amount retailers can charge consumers using the firm’s cards. The company has also started sending in-person auditors to ensure stores are complying with its rules when levying such surcharges. Visa’s moves come as a growing number of small businesses say they’re feeling pinched by the fees they pay to banks to accept electronic payments. They’ve increasingly turned to card surcharges as a way to cover those costs, which are also known as interchange fees.”
“It’s become a familiar sight at small businesses across the country: signs at checkout noting that if a consumer pays with a credit card, there will be an additional fee. Or, at restaurants, waiters will deliver the bill and there will be one price for paying with cash and another for using a card.”
“About 23 percent of small businesses said they charge an extra fee to customers using credit cards, according to a survey last year by payments consultancy Strawhecker Group.”
“It’s not just mom-and-pop shops increasingly leaning on surcharges. A growing number of businesses that have in the past been paid by check or through direct bank transfers — think consultants, general contractors or lawn-care providers — are using surcharges to counter the cost of accepting credit cards for the first time.”
“CardX, a card processor that helps merchants impose surcharging fees in a way that complies with state laws and Visa and Mastercard’s rules, saw payment volume jump 78 percent in 2022 from the previous year.” READ MORE
It’s getting cheaper to make things in China: “While the rest of the world tussles with inflation, China is at risk of experiencing a prolonged spell of falling prices that—if it takes root—could eat into corporate profits, sap consumer spending, and push more people out of work. Its effects would ripple across the globe, easing prices for some products that countries like the U.S. buy from China, but would also deprive the world of important Chinese demand for raw materials and consumer goods, while also creating other problems.”
“Prices charged by Chinese factories that make products ranging from steel to cement to chemicals have been falling for months.”
“For the global economy, extended deflation in China might help cool inflation elsewhere, including the U.S., since its factories make up such a large share of the world’s goods. However, a flood of cut-price Chinese exports on global markets could squeeze out rival exporters in some countries, hurting jobs and investment in those economies.”
“Chinese export prices for steel and chemicals fell by about a third over the 12 months through June. A deflationary spell in China would also likely mean weaker Chinese demand for food, energy, and raw materials, which big chunks of the world rely on for export earnings.” READ MORE
After 23 years in prison, Ladji Ruffin emerged a business owner: “Ruffin's post-prison trajectory is not the norm, but it's one he believes could become far more common via re-entry and second-chance hiring programs, which embrace the incarcerated and formerly incarcerated as a valuable talent pool. He credits his own success to these kinds of offerings: While in prison, Ruffin participated in a braille learning and transcription program; upon release, he launched Authentic Braille Masters, which transcribes text into braille. Today, he also leads a peer mentor program at the Georgia Department of Behavioral Health, hoping to help those currently in the prison system find a new chance to succeed.”
“‘The beautiful thing about second-chance programs is that it gives reassurance to the employers that he or she has the necessary skill set to be able to be employed,’ says Ruffin. ‘I have lived experience that makes [this] my passion.’”
“Despite expanding government and corporate initiatives, about 75 percent of formerly incarcerated people remain unemployed a year after release, according to a 2022 White House brief. Many report facing significant stigma in the hiring process, and even when they do manage to secure jobs, they often have lower overall wages and work in more harmful conditions.”
“‘There's a significant labor shortage,’ says Tem Morgan, senior vice president of 2C Workforce Solutions, an Atlanta-based hiring agency. ‘You put two and two together, and you realize that we can help individuals that really want to work and want to provide for their families. They just need that second chance.’” READ MORE
Mitchell Katz, the 59-year-old owner of the Mitchell Katz winery, died in a car crash: “Katz started the winery in 1998 in part as a memorial to his grandfather, an avid home winemaker. The winery is known for its cabernet sauvignon — especially its flagship Fatboy Cabernet — as well as sangiovese and chardonnay varietals. Katz had earned several notable awards over the years, including a gold medal at the 2015 San Francisco Chronicle Wine Competition for his 2011 Petite Sirah and silver medals for his Wesley’s Blend and 2011 Sangiovese.”
“‘He was larger than life,’ said [Rhonda Wood, co-owner of Livermore’s Wood Family Vineyards]. ‘We were just finally getting to that point where we could enjoy life and sit down and chat about the last 20 years. Everything was going great — and then something like this happened.’” READ MORE
THE 21 HATS PODCAST
Escaping the Valley of Death: Shawn Busse tells Jay Goltz and Jennifer Kerhin that he’s realized that his business, too—like Jennifer’s—is stuck in the valley of death that we first discussed a couple of episodes ago. Shawn’s realization prompts a discussion of what it takes to cross the desert and get out of the valley. We also have a surprisingly entertaining and enlightening conversation about insurance that makes clear why you should occasionally review what policies you have and why you have them. “I have something called directors insurance,” says Jennifer, “and I don't really even know what that is.” Shawn notes that he found a company that helped him reassess several of his insurance lines. “What I like about that,” he told us, “is that while insurance brokers are incentivized to oversell you, because they make commissions,” this company sells its expertise and not policies.”
“Plus: we start the episode with Jay explaining why binge-watching HBO’s Succession brought back all of his worst nightmares about owning a family business.
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Thanks for reading, everyone. — Loren