Today's Argus Leader Business Page features an AP story noting the decline in home mortgage foreclosures and also points out which counties with populations of at least 25,000 have the most and least stress from homes returning to lenders.
Not surprisingly, four South Dakota counties are in the top 20, for the least economically stressed out. Brown, Pennington, Lincoln and Codington Counties brag low foreclosure rates. Our neighbor, North Dakota has a slightly better score. Looking for a foreclosure bargain or future retirement home? Browse listings in Arizona, Nevada, California or Florida. They are considered the most stressful with high unemployment and foreclosure rates.
Conservative living doesn't light the fires of excitement or speculation, but when times get tight and tough, living in the Midwest, adhering to simple principles of living within your means and not overextending gets you through recessions and economic slowdowns. Much of our country can learn from the values we follow each week. They can learn from our conservative small town banks and credit unions.
Another article today shows South Dakota has reversed its brain drain exodus of young minds and is now attracting more young people than it is losing. Obviously, the larger cities are attracting the most people because of job opportunities, arts and quality of living issues, but smaller towns near the populations centers are also growing as bedroom communities where parents want to raise their children and have them attend smaller schools.
The future is bright in the Midwest and the reality of conservative living shines bright in creating a stable, economically advantaged place to call home. Your thoughts?
Wednesday, October 6, 2010
Monday, October 4, 2010
If you can't beat Walmart, join Walmart!
The world of retail changed over three decades ago when a little known company in Arkansas under the direction of Sam Walton started their rise to become the largest retailer in the US. Walmart was considered a threat to every large city, and fear gripped smaller communities as the retail giant quickly grew legs and seemed to walk all over existing firms. Predictions were that Big Wally would close mainstreet businesses because they had every product and provided many services. Investors made millions on the stock with its many splits, but small town America suffered as they sucked life out of each mom and pop store.
The truth is that Walmart's business philosophy, their methods of purchasing product, paying employees and providing benefits appeared almost cut throat to outsiders. Vendors clammored to get their merchandise on Walmart's shelves. Walmart, recognizing their growing retail prowess and power to punish, broke through the bottom of wholesale prices, cutting producer's margins and using those lower costs to pummel competitors who didn't have volume buying muscle. They negotiated payment terms that allowed them to pay when items were sold, to return unsold merchandise rather than sell it instore at a loss. The burden fell on the supplier, not the retailer, a 180 degree turnabout. After all, if you want a position in the market, you have to have Walmart or its larger quantity sister company, Sam's Club or you don't have market share.
We've learned a lot in the past twenty years. Walmart no longer enjoys 20% annual growth as sales have plateaued and employees demand benefits that level portions of the playing field. We've also learned how to compete with Walmart. In essence, you don't compete with Walmart unless you can warehouse billions of dollars of merchandise, buy merchandise cheaper than any competitor and force self-serving terms on suppliers that control your costs and cripple your competitors. The truth is, we can grow local business by selling what Walmart doesn't offer, and by providing services not available in their stores.
Sounds pretty easy until you try to find those niche markets Walmart hasn't captured. The old rule is, "If Walmart doesn't have it, you don't need it". Building back our mainstreets, providing opportunties for families to own their own business will happen if you look for the cracks in Walmart's armor.
One method to find opportunities is as easy as letting your "fingers do the walking". Yellow Pages or business pages are a wealth of opportunities for those hoping to operate their own retail store or service business that large box stores aren't offering. A couple of years ago I was preparing for a speech and went through just a few pages of yellow pages, writing down businesses and services that my hometown currently didn't have. I filled a legal pad without getting past the letter "C".
Obviously, not all of those firms would succeed in a smaller community because you simply wouldn't have the bodies to generate enough revenue, but brainstorming gets pared down to action after your master list is prepared. Once you make your list, simply give it a logical look along with an emotional feel. What do you think interests you off that master list? What is feasible in your community. A healthfood or vitamin store? Perhaps a boot repair store? How about a consulting firm or bail bonds office? The list is limitless, and you may end up with a combination of services or products in order to generate enough revenue to become profitable.
Don't fear Walmart...Join them! Just don't try to compete directly with them because it would be economic suicide. It's the same thinking upscale retail clothing stores have been using for years. Sell lines they don't offer. Open a restaurant, a South Dakota products store, or some other product or service that your community needs, but few offer. Success is just an idea away. Discover it, study it and make it work in your community. Nothing is more satisfying than success. Your thoughts?
The truth is that Walmart's business philosophy, their methods of purchasing product, paying employees and providing benefits appeared almost cut throat to outsiders. Vendors clammored to get their merchandise on Walmart's shelves. Walmart, recognizing their growing retail prowess and power to punish, broke through the bottom of wholesale prices, cutting producer's margins and using those lower costs to pummel competitors who didn't have volume buying muscle. They negotiated payment terms that allowed them to pay when items were sold, to return unsold merchandise rather than sell it instore at a loss. The burden fell on the supplier, not the retailer, a 180 degree turnabout. After all, if you want a position in the market, you have to have Walmart or its larger quantity sister company, Sam's Club or you don't have market share.
We've learned a lot in the past twenty years. Walmart no longer enjoys 20% annual growth as sales have plateaued and employees demand benefits that level portions of the playing field. We've also learned how to compete with Walmart. In essence, you don't compete with Walmart unless you can warehouse billions of dollars of merchandise, buy merchandise cheaper than any competitor and force self-serving terms on suppliers that control your costs and cripple your competitors. The truth is, we can grow local business by selling what Walmart doesn't offer, and by providing services not available in their stores.
Sounds pretty easy until you try to find those niche markets Walmart hasn't captured. The old rule is, "If Walmart doesn't have it, you don't need it". Building back our mainstreets, providing opportunties for families to own their own business will happen if you look for the cracks in Walmart's armor.
One method to find opportunities is as easy as letting your "fingers do the walking". Yellow Pages or business pages are a wealth of opportunities for those hoping to operate their own retail store or service business that large box stores aren't offering. A couple of years ago I was preparing for a speech and went through just a few pages of yellow pages, writing down businesses and services that my hometown currently didn't have. I filled a legal pad without getting past the letter "C".
Obviously, not all of those firms would succeed in a smaller community because you simply wouldn't have the bodies to generate enough revenue, but brainstorming gets pared down to action after your master list is prepared. Once you make your list, simply give it a logical look along with an emotional feel. What do you think interests you off that master list? What is feasible in your community. A healthfood or vitamin store? Perhaps a boot repair store? How about a consulting firm or bail bonds office? The list is limitless, and you may end up with a combination of services or products in order to generate enough revenue to become profitable.
Don't fear Walmart...Join them! Just don't try to compete directly with them because it would be economic suicide. It's the same thinking upscale retail clothing stores have been using for years. Sell lines they don't offer. Open a restaurant, a South Dakota products store, or some other product or service that your community needs, but few offer. Success is just an idea away. Discover it, study it and make it work in your community. Nothing is more satisfying than success. Your thoughts?
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