author

About Julija A.

Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

Blog posts

Big Business

Today, Salesforce announced its plans to buy data visualization company Tableau in an all-stock deal with an equity value of $15.7 billion. They will acquire shares of Tableau Class A and Class B stock in exchange for 1.103 shares of Salesforce stock, and Tableau will continue to operate independently, under the CEO Adam Selipsky. It will also keep its own branding and headquarters in Seattle. Tableau’s CEO Adam Selipsky will be working with a new leadership team, and they plan to expand on the Einstein platform, which was launched back in 2016. This AI software is meant to help users improve their omnichannel presence and build apps across the Salesforce platform.  With intentions to boost their work in data visualization, Salesforce is focusing its efforts on better analytics that will complement their own CRM systems. The acquisition is expected to be completed in October 2019, following Salesforce’s third fiscal quarter ending.The shares of Tableau have jumped by 36% in the meantime, and Salesforce’s have dropped by 3%, following the announcement today. Reportedly, Salesforce also attempted to acquire LinkedIn in the past but lost the bid to Microsoft. This move is likely a response to Google’s acquisition of Looker and its own efforts to improve analytic solutions and deliver industry-specific results to its users. Along with Amazon’s recent acquisition of Sizmek’s ad server, this shows that competition between the giants is on the rise, and a lot of small businesses and SMEs are being left on the sidelines. There’s a widening gap between profitability of large and small businesses, and with the latest minimum wage laws looming, small businesses are the ones most likely to take a hit. Size often yields to financial power, and large corporations such as Amazon and Walmart have more market capacity and can drive harder bargains when negotiating prices and delivery terms. Government regulations and tight rules are also to blame for the burden SMEs have to face. High taxes and lack of adequate subsidies means that small businesses are often forced to close down or sell their ideas to big players. The impending tax crisis could be disastrous for startups and struggling companies, but it’s not all bad news. Technological advancements, especially AI, could help businesses lower costs and get back in the game. In fact, Salesforce’s new acquisition is something a small business can benefit from. With new tools and an easy-to-use cloud system for your customer relationship management needs, it is becoming increasingly easier to make the best of automated systems and help your business expand.

June 10,2019
Read Article
Startups

According to the 2019 Startup Outlook Report, 50% of US startups are concerned that trade policy between the US and China will hurt their businesses. What’s more, 33% are somewhat worried, while 17% are very concerned. This rising anxiety is due to China’s ‘Made in China 2025’ plan, a strategic project issued by the Chinese Premier Li Keqiang and his cabinet in May 2015. In short, China is working towards producing the highest value products and services and becoming a high-tech manufacturing superpower. The industries in for a makeover include information technology, AI, IoT, robotics, and others.How will China achieve this goal? Firstly, China’s domestic content of core materials will increase to 40% by 2020 and 70% by 2025. They also plan on investing in quality-driven product innovation as opposed to production. Secondly, China is investing heavily in Russian and European US competitors.‘Made in China 2025’ Plan For Tech World Domination China has more Unicorn companies than the US, in spite of the US being the primary source of venture capital, according to a Churnbase study. In 2014, 150 scientists and scholars drew up the 2525 plan, under the supervision of the Ministry of Industry and Information Technology.Miao Wei, China’s industry and information technology minister, stated for the South China Morning Post that it would take at least 30 years for China to become a manufacturing superpower. Still, the desire to keep up with the US and eventually surpass their tech monopoly is part of President Xi Jinping’s “Chinese dream” and a matter of national pride.The Threat of Cyber Attacks and the Theft of Intellectual PropertyUS startups and powerful corporations alike are raising eyebrows at China’s ambition, focusing particularly on the threat of cyber warfare and the theft of intellectual property. In 2015, presidents Obama and Xi Jinping reached an agreement that they would end mutual industrial espionage. According to a 2016 report by FireEye, China honored this agreement, with the number of Chinese cyber attacks on the US falling by 83%.In 2018, president Trump cut the deal off. According to an NSA spokesperson, digital attacks against the United States’ financial, transportation, energy, and healthcare sectors have been on the rise after a brief ceasefire. Right now, According to a Time magazine article, 70% of America’s corporate intellectual property theft is believed to originate from China. China Investing in US CompetitorsSmall businesses survival rate, currently at 30% past the 10-year milestone, might drop because of this economic shift, with competition rising overseas. After Huawei, the world’s largest manufacturer of telecommunications equipment, was blacklisted by US companies, tensions rose significantly. The US stated that they would refuse to supply Huawei with goods and services, threatening to choke off China’s access to key technologies. Soon after, Beijing announced it would release a similar list of “unreliable” foreign entities, and even stop supplying the US with rare earths and other resources. China also resorted to investing a bucketload of capital into US competitors from Russia and Europe. In the most recent case, Chinese fintech startup Pingpong announced they would invest over  €100 million ($113 million) in Luxembourg startups in the coming years. The immense funding will drive collaboration between Luxembourg and Pingpong on various fronts, such as Chinese exports to the EU, Pingpong’s local payments, and online banking projects.Also, China’s Alibaba and Russia’s RDIF sovereign wealth fund plan on investing $100 million in a shared, Russian venture. The plan is for Megafon, the Russian mobile phone operator to sell a9.97% stake in internet group Mail.ru to Alibaba. Megafon will also get 24.3% in the JV, with Mail.ru will adding its Pandao e-commerce business to the JV and $182 million in cash. The Consequences for US Tech StartupsAn innovation-powered US economy is aware of the Chinese threat. According to a 2018 Global Startup Ecosystem Report, advanced manufacturing and robotics are the most lucrative tech subcategory at a growth rate of 189.4%. With the US attempting to stay at the forefront of global technology, the threat of data breaches and intellectual property theft could be truly damaging to startups and technology leaders. The cyber attack deal has long been abandoned, and we are yet to see a Huawei sales ban backlash. The consequences of potential Chinese rise to tech power is unlikely to affect US startups at the current time. Still, the more successful startups striving for unicorn-status are already falling behind and facing an uncertain future in several decades’ time.

June 10,2019
Read Article
Startups

Small business owners seem to be in high spirits since May 2019. According to the National Federation of Independent Business, the index of small business optimism is the highest it’s been since October—105.0 points. This surpasses economists’ predictions (102.0 points) and indicates a positive change for a lot of companies. The index had been in decline before February 2019, when it started slowly increasing, eventually reaching historically high numbers last month as six components improved, one fell, and three were unchanged. Reports show that 30% of firms plan to increase their capital spending, while the share of companies expecting to raise selling prices fell to 20%, which may slow down pricing power. Despite trade uncertainty, businesses are expecting more favorable prospects. Based on a survey of 650 small businesses, 9% of firms reported higher nominal sales in the past three months. Here’s some more interesting data: according to the NFIB survey, 62% of small businesses are trying to hire more workers in their field, but 54% of them report difficulties with finding competent employees for the positions that need to be filled. This seems to be a common struggle for a lot of small companies, as 24% of owners said that finding qualified workers is the single biggest challenge they face. According to some economists, the claim that there aren’t enough professionals available is grossly overstated. Businesses could find better workers if they increased pay and benefits, especially in highly-competitive industries. Despite these claims, NFIB states that the increase in compensation is the highest it’s been since 1973. More owners are starting to understand the benefits of offering competitive salaries when searching for talent. It’s important to bear in mind that there are fewer Americans in the labor force now than there were a decade ago. An impressive 64% of companies also reported increased spending on capital equipment, which is a six-point gain since February 2018. This general optimism is driving the workforce forward and encouraging firms to hire more skilled workers. We can also expect more startup openings in the upcoming months, as analysts predict positive reports will motivate people to open their own firms. Given the May readings, it would seem that most small businesses are looking forward to branching out and growing their companies. This kind of enthusiasm needs to be nurtured if we are to ensure healthy economic progress.

June 12,2019
Read Article
Small Business

In a surprising turn of events, the small fish have come out to defend the big sharks. After the House Judiciary Committee’s inaugural hearing on Tuesday afternoon, small businesses are more scared than ever about the fate of Facebook, Amazon, Apple, and Google. The business practices of these tech giants are currently being dissected as Washington’s fear over their influence on public life and the American economy rises, but the small players are opposed to the investigation. Members of a small business advocacy group called Connected Commerce Council (3C) expressed their concerns and urged the Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law to take into consideration the importance of these companies for small businesses. The House Judiciary subcommittee has been investigating mega-corporations to find out whether their market dominance has suppressed competition unfairly. While harming smaller firms seemed like the most likely outcome, it would appear that these tech giants are actually supporting them using an array of invaluable tools and services. The palette of useful tools these large companies provide at low prices is crucial to startups, entrepreneurs, and small firms who use them for marketing their own products. 3C’s also provided the committee with the results of a recent economic report put together in partnership with Deloitte, which states that American small businesses greatly benefit from having access to digital tools provided by the tech giants. “This market is interconnected and big companies power growing companies to compete and win," C3 president Jake Ward said in a press release. Congressional reach into the private sector could potentially be detrimental if it affects the ability of smaller firms to conduct their businesses safely and successfully. House Democratic Chairman Hakeem Jeffries claims that people from both sides of the aisle should have the chance to speak and that we should hear from the CEOs of big tech companies regarding the concerns being raised. The investigation is largely backed by the Democratic leadership, and it represents the first congressional probe into the antitrust allegations. House Speaker Nancy Pelosi claims that “the era of self-regulation is over.” Surprisingly, the Republican party is also criticizing the reach of big tech companies. One of the biggest government concerns is related to the way companies such as Facebook and Google influence the news media. Both Democratic and Republican representatives have agreed to co-sponsor legislation that would allow local news organizations to unite and negotiate with the tech giants when it comes to issues such as news quality and access.   This is one of the biggest bipartisan issues that affects both Democrats and Republicans. While the conservatives don’t enjoy overregulation, they have concerns about the monopolization of the market. What the final outcome will be remains to be seen, but for now, small businesses are rooting for the big guys.  

June 12,2019
Read Article
Small Business

It looks like small businesses are ready to go full steam ahead this quarter. The MetLife and US Chamber of Commerce published the Q2 Small Business Index, which shows an increase of 3.1 points—a strong rebound after the drop in the first quarter of 2019. The current index score is 68.7. Small business owners are experiencing a boost in confidence that can be attributed to the overall positive perception of the nation’s economy. With improved cash flow nationwide, a lot of companies are getting back on their feet, eager to face new challenges. The drop since the last quarter can at least partially be attributed to the longest government shutdown in American history. Small businesses are finally recovering from the financial blow, and this 3.1 point increase is the most significant quarter-to-quarter increase since the Index came into existence. The results were taken from a survey of 1,000 companies, and they show an upward confidence trend across nearly all demographics. 58% of female business owners have expressed feeling optimistic about the future, almost matching the 59% of male owners who feel the same. Statistics also indicate an increase in hiring new employees. Millennials and Gen-Xers seem to be taking the lead here—39% of small business hiring plans nationwide are attributed to these demographics, even though they represent only 27% of survey respondents. The Index also examined how small businesses handle health insurance. As many as 69% of small business owners claim selecting a health insurance plan is time-consuming, difficult, and that there isn’t enough information about it. On a related note, 1 in 5 respondents claim that they are unable to make informed decisions and choose the best coverage for their needs. Out of those surveyed, 32% of small business owners turn to brokers, agents, and consultants for advice on health insurance, 9% rely on online research, and 7% seek advice from other owners. Other sources include HealthCare.gov, health insurance company sites, and Professional Employer Organizations. Finally, 7% of respondents stated that they don’t know where to turn for more information. So, what are the owners looking for when choosing health care plans for their employees? Research shows that 20% of small business owners are concerned with keeping monthly premiums low, 20% prioritize minimizing out-of-pocket costs such as deductibles and copays. In contrast to that, 9% seek flexibility and variety when making a choice, and 7% demand access to quality hospitals and treatments. Aside from the puzzling complexity of healthcare coverage plans, businesses are confident about their future. Despite economic hardships in the last quarter, the outlook remains positive, and owners are willing to invest in their companies and strive towards success.

June 13,2019
Read Article
Finance

A U.S. commodities regulator has issued a warning against the devastating and lasting consequences climate change could have on global markets. Rostin Behnam, a commissioner at the Commodity Futures Trading Commission (CFTC), claims that climate change could affect every aspect of the U.S. economy. By highlighting the risk, Behnam is positioning himself in direct opposition with President Trump, whose administration has mostly denied or ignored statements made by climate scientists. “The impacts of climate change affect every aspect of the American economy – from production agriculture to commercial manufacturing and the financing of every step in each process,” Benham said at the meeting of the CFTC’s market risk advisory committee.At the meeting, the regulator cited a $160 billion global cost related to natural disasters in 2018, a record high that paints a very bleak picture of the world we live in today. In the U.S. Midwest alone, the increase in temperature has led to catastrophic tornadoes and floods. The country has also experienced reduced crop yields, which resulted in volatile markets and chaos in commercial manufacturing. Rostin Benham also stated that climate change could cause a mortgage meltdown, similar to the one in 2008. With natural disasters so widespread and probable, insurance companies will be faced with higher concentrations of risk and won’t be able to collect enough premiums to support payouts or sustain themselves in the long run. This could negatively impact the stability of the financial system by causing a domino effect and spreading to other industries. It’s important to point out that the commissioner was appointed by President Trump in 2017. The law of vacancy states that a Democrat must fill the position, which puts Benham in a unique position to push towards climate change awareness and warn businesses about the impending consequences. The damage must be mitigated if the commodity and financial markets are to survive. Commercial banks, farmers, and insurance companies are at a particularly high risk at the moment, and steps must be taken to preserve the health of the economy. President Trump will be forced to talk about the issue when he addresses farm states during the 2020 reelection campaign, which puts him in an awkward position, given the fact that natural disasters have already caused damage in these states. Financial regulators have also decided to pay greater attention to the effects of climate change. The Network for Greening the Financial System, recently formed by a group of central banks, has taken the initiative to “manage risks and mobilize capital for green and low-carbon investments,” according to their website. The country must prepare for the dangers that global warming poses to the economy. Without adequate systems that can minimize the damage, the whole world could be faced with appalling financial consequences.

June 13,2019
Read Article
Small Business

Steal from the poor and give to the rich—it would seem there’s no more honor, even among criminals. A fraud ring, led by Demetrios “Jimmy” Boudourakis from Farmingdale, NY recently targeted 35 small-business owners, not only within Long Island but also reaching as far as California and Florida. He stole more than $2 million through a widespread loan scheme. This Long Islander managed to find the names of small business owners who were rejected for loans using the dark web, and then cold-called them, claiming their loans could be approved if they paid fees and interest up front. This classic boiler room plot was successful in many instances—one victim alone was scammed out of more than $150,000. Boudrakis and his associates got cashier checks or wire transfers, and would then make excuses to the victims about why the money wasn’t coming. In other instances, they would simply refuse to answer calls.Boudrakis was charged with grand larceny, money laundering, and other crimes, and has pleaded not guilty at the arraignment in Central Islip, on Wednesday. According to the records, Suffolk County District Judge Gaetan B. Lozito set the bail at $1 million in bonds or $500,000 cash. The Suffolk DA, Timothy Sini, claims that the fraud began somewhere in 2016 in an office in Melville, NY, and then moved to Seaford, NY. Appropriately enough, the building where the office was located had a huge poster of a “Wolf of Wall Street” hung up on it.  It took over a year and the joint efforts of Nassau Police, Suffolk Police, New York State Police, FBI, and the Drug Enforcement Administration to investigate the scheme and build a strong enough case to catch the criminals and break the fraud ring. Along with Boudrakis, there were several other associates: Johnson Joseph of Brentwood, NY, charged with grand larceny, money laundering, and a scheme to defraud, Nadim Afzali of Hicksville, NY, charged with a scheme to defraud, Christopher Looney of Bethpage, NY, charged with grand larceny and a scheme to defraud, Tanya Balbi of Farmingdale, NY, charged with a scheme to defraud, Johnson Joseph of Brentwood, NY, charged with grand larceny, money laundering, and a scheme to defraud, and finally, Jude Brun of Elmont, NY charged with a scheme to defraud. They have all pleaded not guilty. Michelle Soccodato of Hicksville, NY, has yet to appear on an arraignment. She has also been charged with a scheme to defraud. These kinds of schemes are incredibly dangerous because they target the weak and the vulnerable. Any small business owners who believe they were a victim of Boudrakis’s scheme should contact the DA’s office for help.

June 13,2019
Read Article
Retail

How does a brick-and-mortar brand survive in a world of Amazon’s retail monopoly? A few companies seem to have it figured out. In the past week, Target, Walmart, Best Buy, and Lululemon have reported a head-spinning increase in eCommerce sales, which immediately resulted in stock share growth. Target (with a 42% increase in online sales), Lululemon (with a 35% increase), Walmart (with a 37% digital growth), and Best Buy (with a 14.5% digital growth) have all reported a very successful quarter. Dick’s Sporting Goods online sales have also gone up by 15%. As for the stocks, it would appear that investors are ready to reward this triumphant step forward. Lululemon’s stock share is up by more than 42% since January, while Walmart has gained 16% in stock shares so far, and the number seems to be on the rise. Starbucks has gained 30% and Chipotle 70% in stock shares. So what’s the catch? According to Sucharita Kodali, a retail analyst at Forrester Research, it was the timing. “Now, it’s easier in some ways to be a late mover,” she said in an interview. Without having to reinvent the wheel or be at the forefront of innovation, a lot of companies were able to pick up tried-and-true tips from businesses who already went through the process and managed to figure out exactly what works. They were able to learn from Amazon and create an online presence to complement their physical stores and give them a boost. For companies like Walmart, acquisitions of smaller startups such as Jet.com also gave them an influx of tech talent that made the process seamless. But it’s not just Amazon’s experience that’s helping these companies succeed. What these firms have is something Amazon can’t match—brick-and-mortar stores. This omnichannel approach appeals to the customers because it gives them a multitude of options to choose from. From curbside deliveries to buy-online-pick-up-in-store, these businesses can reduce shipping costs and provide better customer experience. For Target, their same-day delivery service, curbside pickup, and in-store pickup drove more than half of its 42% e-commerce sales growth and 25% of same-store sales growth in the first quarter of 2019. When a customer picks up an item in-store, it’s 90% cheaper for Target because they don’t have to ship it from the warehouse. Walmart, Target, Home Depot, Best Buy, Macy’s, Dick’s Sporting Goods, Kohl’s, Nordstrom, Lowe’s and J.C. Penney currently have the best omnichannel presence. Other companies that wish to follow their trail of success need to provide more shopping options to satisfy consumers and keep them loyal to the brand.

June 14,2019
Read Article