Thanksgiving Day is a national holiday bearing religious significance which is usually celebrated on the fourth Thursday of November in the US.  For the past years, more and more consumers have been looking forward to the day after Thanksgiving for a chance to take advantage of deep discounts offered by retailers across the country.  This day known as Black Friday signals the start of the Christmas season.  The explanation for the term is related to an accounting practice in which red ink indicates a negative amount or loss while black indicates a positive amount or profit.  Thus, this day is an opportune time for businesses to be “in the black” because of the unusual willingness of shoppers to spend which they justify with the slashed prices.

Big-named retailers have already laid down their strategies for the purpose of getting the largest share of these willing spenders.  Apparently however, online merchants have their own plans as well to get their share, placing special interest on shoppers who wish to avoid the aggravation of falling in long lines.  In fact, they are eyeing the possibility of grabbing the sales from consumers who are already in line in crowded retail stores by making available mobile-only deals which they can take advantage of through their mobile devices.  The aggressive promotion of online merchants are causing traditional retailers to fight back by preventing price comparisons  in opting not to display standard bar codes as in the case of Best Buy and through much earlier opening times.

The move has met considerable negative reaction because of the earlier time that will definitely cut into Thanksgiving Day itself.  It remains to be seen what the Battle of Black Friday has yet to unleash this week.

Just this afternoon during my regular meeting with the management team of my company, I was reading the newspaper to see what new developments that the country has been achieving, in the business aspect of course. While the usual crisis as far as unemployment and companies merging or declaring bankruptcy one after the another was still in the top of the heap of news, I noticed that the dollar to peso exchange rate was below the Php 50.00 = $1.00 for the first time after a long time. It currently stands at Php 43.88=$1.00, a far cry from the recent years where is rarely went below Php 50.00=$1.00. Then it hit me that it was just exactly about a year ago when the peso was slowly improving, it took almost a year for it to break through the Php50.00 barrier, something that most deem as a good sign as far as the economic development of the Philippines is concerned. A lot of this can be attributed to the fact that the fast growing number of overseas workers, particularly nurses and specialized professions, has been remitting their earnings mostly in the form of dollars or other foreign currencies.

The same can be said for other Asian economies where their currency has improved against the USD, even major ones like Japan. In a time when everyone is worrying about a double dip recession in the US and Europe, and even a slowdown in China- Asia may by default benefit as a perceived safe haven. So while a strong Japanese yen vs. the USD may hurt the export industries like Toyota, Sony or Ajinomoto- the repatriation of funds should more than balance this out and in fact lead to great internal investment.

If my presumptions hold true and the trends do not falter, it can still improve, considering that the holiday season has not yet even been started and this is a good sign for the Filipino people, particularly for trading companies such as the one I am handling right now. Merlion International Sales, Inc., thrives in the exchange rate , owing to the fact that most of the goods are manufactured and produced in Taiwan, a country that has a higher cost of labor and production costs compared to the local manufacturing in the Philippines.

On one side, I still wonder if this is really a good sign, or it is just that other countries are now catching up towards the jumpstart practice as far as economic management is concerned. If there is one thing that most people should consider before celebrating, it is the reaction of other currencies with regards to the Philippine Peso. If there is no significant change, I am sorry to break it to them, but maybe there is something we are not looking at. The dollar has become the focal point for comparison, but it should be noted that other currencies also have something to do with the entire flow of the economy for local and foreign counterparts.

Links and References:

• Factors Influencing a Currency Pair Exchange Rate
• A Currency Exchange Rate-driven vs. Strategy-driven Analysis of Global Sourcing
• Floating and Fixed Exchanged Rates

As a matter of fact, other business experts are thinking along the same lines. I recently read an article by Jared Lauber and Joe Orlando of Frank, Rimerman Consulting. It was thought provoking and encouraging at the same time. The conclusion really struck home:

The key to any decision-making process, especially in the assessment of risk, is a continuous and thoughtful assessment of available information. Every business owner must develop a fundamental understanding of the facts surrounding their business. Business owners need to know as much as they can about themselves and the world in which they compete. Similarly, every individual needs to understand their personal income statement and balance sheet. The better prepared a business owner or individual is to embrace change, understand risk, maintain visibility and seek out opportunity, the more likely they can begin the process of putting comfort back into what has become an uncomfortable world.

This simply means that we may have to look outside of our comfort zones and perhaps find a hidden gem that can make our comfort zones ever wider. Brilliant, don’t you think?

In fact, AP just released a report on a survey in this regard. The details:

NO BONUS: More small-business employees can expect no end-of-year bonuses or gifts for 2009.

A recent survey of small business owners or managers showed fewer of them planning gifts or cash for their workers. “Business owners are still feeling pinched cash wise,” said American Express business adviser Alice Bredin. AmEx’s small business division conducted the survey.

Last year, 44 percent of those surveyed said employees would get an end-of-year bonus. This year, only 31 percent did. Even fewer are planning raises: 16 percent, compared with 30 percent last year. Meanwhile, in 2008, 46 percent of owners or managers said employees would get holiday gifts. This year, it’s 35 percent.

The business owners or managers surveyed oversaw companies with fewer than 100 employees.

This is definitely bad news for small business employees, but perhaps business owners can find a way to lessen the impact of not being able to give bonuses? What are you planning to do for your employees this Christmas?

Photo courtesy of Acme Climate Action

Think about potential sources of money in case you need extra cash to run the business. The small business initiative by President Obama should be at the top of your list. But you should also look at other sources just in case. Relatives? Is that a good idea? Friends? I think that these two groups of people should be your last resort. Actually, if you do not have any other alternative, you might want to let your idea sit for a while till you find a better (and less complicated) source of money.

More than the money that you will be using for your business, consider how this endeavor will change your life – and that of your family’s. This is one thing that has been overlooked by some entrepreneurs. Even if your business plan is as solid as can be, if you do not anticipate the changes that it may wrought on your life, you might have a hard time dealing with circumstances. And remember, your family will be involved in those changes so they should know what they are getting into as well.

Photo courtesy of http://ccsmallbusiness.files.wordpress.com/2008/06/business-debt119.jpg

Think about it, there are certainly a lot of advantages to starting up a business right now. While it will not be easy, it could be the right moment for you. So what are these advantages? For one, costs will definitely be lower. With fewer people starting their own business, leasing space will be cheaper. Finding employees (if you need them) should also be easier as more people are looking for jobs.

One thing you have to take note of, however, is that you have enough money to keep you going. The truth is that while it should be relatively easy to start a business, you will face challenges in maintaining it for the next several months. The idea is for you to have enough money to keep the business going for say, 3 months at least, even if money does not come in within that period of time.

Another thing that you have to consider is the market which you will be penetrating. There are certain businesses that you should stay away from during hard times. These are the luxury shops, like spas and similar services, which might not be high on the list of consumers. Instead, study your market carefully and look for a need that has to be met.

(to be continued)

Photo courtesy of Campus Access

If news reports are to be believed, then there is hope – a lot of it. Bloomberg recently ran a story about Obama’s plans to boost small businesses in the country. The story says that:

President Barack Obama will spend more than half of the $730 million in government funds set aside to help small businesses to expand federal guarantees and lower lending fees to try to revive the flow of credit, people familiar with the matter said.

Obama and Treasury Secretary Timothy Geithner will announce the $375 million plan tomorrow as part of a strategy to bolster Small Business Administration lending, the people said. The money will come from the $787 billion economic stimulus plan Congress passed last month.

I don’t know about you, but this is looking good. I am sure that many of you have been facing liquidity problems. Big or small, businesses in the United States have definitely been suffering from cash flow problems. With this aid in the horizon, we just might have better things to hope for. What do you think? Will the aid actually materialize? Will we actually feel the effects? I am definitely hoping.

Ever since President Obama stepped into office, talks about the stimulus package have been going on. From the capitol to Wall Street to coffee shops – the stimulus package has been much talked about. Some people are all for it while there are those who think that it’s a waste of tax payers’ money.

On the part of small business owners, however, the stimulus package just might be what they need to tide them over till the economy gets back on its feet. MSNBC published a feature last week, stating how the stimulus can actually be put to good use by small business owners:

A meeting brought federal officials and local entrepreneurs together on Thursday to help small business owners navigate the stormy economy.

Representatives from the Small Business Administration and Rep. Lee Terry met with business owners to discuss ways to modify programs designed to help them. “Small business is our economy,” Terry said.

He said the stimulus package, which provided $730 million for the SBA, will help provide new loans to assist small businesses with meeting debt payments, will offer higher loan guarantees and reduce loan fees.

What does this mean to you? If you are a small business owner and you have been struggling – or you are looking at that possibility, then the knowledge that you can get new loans with lower fees would be more than welcome. In this time of difficulty, this opportunity is a refreshing one, with the conventional lenders and creditors being more conservative. Let’s see how this thing develops.