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Posted on December 28, 2008February 1, 2012 by Daniel Klotz

11 Problems You Can Solve in 2009: Part V – Telecommuting

In 2009, I expect telecommuting worldwide to take a hit. Yes, we saw an increase in employers allowing employees to telework in 2008—the figure jumped from 30% of organizations in 2007 to 42% in 2008, according to a WorldatWork study.

While a CompTIA Web survey indicated that telecommuting improves productivity and lowers costs, the fact remains that allowing employees to telecommute introduces risk to employers. Risks to the security of data is just the beginning; many managers and organizations simply don’t have experience with a telecommuting program, which makes a new telecommuting program a management and human-resources risk.

If there’s one trend you can count on in 2009, it’s this: Employers will seek to avoid risk with reckless abandon.

While many are continuing to push for the spread of telecommuting (and some see the upward trend to continuing through next year), it’s going to be a very tough sell to employers.

The number of managers experienced with telecommuting is especially low in areas, like Lancaster County and Central PA, that were historically heavy on manufacturing. When it comes to using communications technologies and adopting fresh business strategies, the rust belt is rusty.

Therefore, I see very little opportunity to change the way existing organizations handle telecommuting, particularly in our region. Where I do see the opportunity is in attracting people and companies that already embrace telecommuting to our region due to the combination of our low cost of living and our proximity to major metropolitan areas. Doing that attracting is the fifth opportunity for entrepreneurial fun and profit in 2009

No. 5: Telecommuting

Problems: Few Central PA employers will offer telecommuting as an option; less “tele-commutable” work worldwide
Assets: Low cost of living in Lancaster/Central PA, combined with being within travel distance to major East-Coast metropolitan areas

There is no denying that telecommuting is more viable now than ever. It may stop expanding as a trend in 2009, but by some estimates as many as 59% of organizations offer some of their employees the option to do at least some work outside the office. One of the big reasons that employers embrace telecommuting is because it can drastically reduce costs (especially the overhead costs of having to “house” an employee in the office).

If this is what you see when you telecommute, doesn't it make sense to live somewhere with a low cost of living? Photo by Flickr user DDFic, under a Creative Commons license.

At the same time, there are still risks and disadvantages to employers. The most popular way of mitigating those risks and disadvantages is by having employees who telecommute spend at least a little time each week on site, either in the office or at a face-to-face meeting with a client.

Whether the case at hand is of an individual or of a company, the cost of living in Lancaster specifically and Central PA generally should be attractive. If you’re going to telecommute, it makes more sense to do so from a location where the cost of living is low rather than from, say, midtown Manhattan.

Lancaster is a more affordable place than Manhattan. It’s 49% cheaper to live here. It’s 34% cheaper than Boston, 49% cheaper than Washington DC, 19% cheaper than Newark, 7% cheaper than Baltimore, and 8% cheaper than Philadelphia. (You can do your own comparisons at BestPlaces.net.)

For an individual or company, relocating to this region would fall somewhere between having hour-long commutes and telecommuting from India. An individual telecommuting from India can’t be at the important meeting in Baltimore tomorrow afternoon. An individual with an hour-long commute is still in the suburbs of a city with a high cost of living (to say nothing of the 2 hours spent in transit each day).

Telecommuting required a new set of tools, procedures, and practices in order to become viable on a mass scale. Telelocating (telecommunitying? proximity-telecommuting?) will require the same. Serious profits await the ones who develop those tools, procedures, and practices and bring them to scale.

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Read Part I – Construction
Read Part II – Journalism
Read Part III – Continuing Ed
Read Part IV – Lending

Posted on December 19, 2008 by Daniel Klotz

11 Problems You Can Solve in 2009: Part IV – Lending

In 2009, there is a renewed opportunity to tap into something that has been paid less and less attention in recent years: Max Weber’s good old Protestant work ethic. Finding appropriate ways to leverage it constitutes the fourth problem you can solve next year for fun and profit.

No. 4: Lending

Problem: Tight lending and poor investment returns
Asset: High levels of personal savings in our region

Credit has dried up. When banks are reticent to loan to each other, what makes you think they’re going to loan to you?

Yet again, there appears to be a viable solution in localizing. While national banks are hurting, local banks in Central PA like Fulton, Union National, and Susquehanna are running strong. Their balance sheets look good (people actually keep money in those banks, as opposed to just borrowing from them), and corporate lending is active.

A profitable way of solving the problem by using the assets at hand may involve local financial institutions. Then again, they may play only a peripheral role.

Make this man proud. Hook up local hard-working folks with interest on their savings by lending to other local hard-working folks.

Here’s the deal: We live in an area where personal savings rates are high. People are earning precious little interest on those savings. The fact that other people need to borrow money isn’t a problem, it’s a huge local opportunity.

As of 2007 (the most recent year that data is available for from the Bureau of Labor Statistics), residents of the Northeast U.S. save, on average, 6.6% more of their income than residents of the rest of the U.S. Here in the Northeast the average household puts 23.5% of its annual income ($15,816) into savings, as opposed to 16.5% in the Midwest, 19.1% in the South, and 15.0% in the West.

It’s worth noting that in the Northeast, an average of $1,730 (9.2%) of household income came from investments (including interest, dividends, and rental/property income).

OK, so narrowing it down to the Northeast is cool and all, but how can I say the strength of this asset (personal savings) is particularly high in Central PA? Here, I have to rely on the same rationale Forbes used when they named Lancaster the tenth best city in which to ride out the recession: the equity people have in their homes.

As of September, according to Zillow real estate market reports, Lancaster County homeowners who made their purchase in the past five years have a median equity of $40,000 in their homes. That’s 30% of their home’s value.

Compare that with the median equity held in nearby Philadelphia (26%) or Baltimore (23%). In Boston, which edged us out in the Forbes list, it’s 21%. To see how bad it gets, observe the staggeringly negative 20% in Stockton, CA.

What’s more, in Lancaster, homes have only declined 4.9% in value since their peak (which was in the second quarter of 2007), versus 6.4% in Philadelphia, 10.2% in Baltimore, 16.6% in Boston, and 49.0% in Stockton. Elsewhere in Central PA, State College is rocking—where prices still haven’t peaked—and York-Hanover isn’t doing too poorly—home values there are down 10.7% from their peak.

With that evidence, the opportunity here is obvious: people in our area have savings. The savings are real, too—they’re not about to burst in a housing bubble or a Madoff Ponzi scheme. But the savings aren’t earning much interest. And if those savings could benefit the local economy while earning at least decent returns, that’s even more attractive. We have talented and resourceful individuals and entrepreneurs who could use some loaned capital. Put two and two together, and make a profit off this. Ready? Go.

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Read Part I – Construction
Read Part II – Journalism
Read Part III – Continuing Ed

Posted on December 17, 2008February 1, 2012 by Daniel Klotz

11 Problems You Can Solve in 2009: Part III – Continuing Ed

People are losing their jobs, as we know from the headlines. In our city, people’s income is going down, as we know from my intrepid reporting. We are all nervous about the immediate future, with good reason.

It seems that many people are busier than ever earning money and trying to trim spending. There isn’t yet quantitative evidence to support an assertion that we’re busier than ever, but I expect that it will be coming.

One measure of busyness is the number of people holding two jobs. Both in sheer number of people and as a percentage of all employed people, the measure was down in November compared to past years, according to the Bureau of Labor Statistics). It could be that there are fewer second jobs to go around, or it could be issues like not being able to afford transportation or childcare in able to work two jobs. It’s hard to tell.

The BLS’s American Time Use Survey is the best gauge we have on how people are spending their time, but it always lags one year behind. So the best we can do is to observe and make general observations. It does appear that as jobs are being cut, the workload falls to others, who then work longer. Other people are working two jobs, while still others are busy hunting for a first, second, or new job. Nonprofits are certainly overworked these days, with need increasing but donations and volunteer hours decreasing.

In short, people’s time is still limited, but at the same time our nervousness about the future compels us to prepare ourselves by honing our skills. That brings us to the third problem you can solve in 2009 for fun and profit.

No. 3: Continuing Education

Problem: People have less time.
Assets: Meeting space is more affordable; desire to learn is up; Web technologies are abundant.

Online universities are thriving in the current environment, as people want to go back to school but have limited resources of time and money to spend. There’s a strong market out there for other entrepreneurs to reach.

Supplement online learning with face-to-face meetups in physical classrooms and take low-residency education local. Photo by Flickr user Cherice, under a Creative Commons license.

I personally see the greatest potential not in webinars, online courses, how-to blogs, or Web-based professional networks, but rather in combining those media and technologies with face-to-face interaction. Take low-residency local.

“Low residency” is a popular way of offering master’s degrees. I can get an MFA from Seattle Pacific University without moving to Washington state; I simply fly out there a few times over the course of a couple years, and do the rest of the work from home. I think the situation is ripe for local low-residency offerings, and not just from traditional higher-ed institutions.

Every time I need to leave where I am (like home or work) and go somewhere out of my way, the educational experience becomes a degree more high-residency. High residency equals inconvenient.

At the same time, people are hungering for something more than discrete mini-workshops. Find a way to offer a series of face-to-face mini-workshops (especially with a networking element added in) where participants can continue learning online between meetups, and you’ll have a very marketable product. Spread hours of instruction over several weeks by chunking it out and conducting at least half of it online.

Cheap space: The nice thing is that there is a lot of real estate just sitting around right now. Company offices have conference rooms that they’d love to rent to you or let you borrow. Hotels and other traditional meeting places are getting less business, so rates are more negotiable than ever. All sorts of buildings sit empty in the evenings and on weekends.

Who’s going to take this opportunity and capitalize on it in 2009?

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Read Part I – Construction
Read Part II – Journalism
Read Part IV – Lending

Posted on December 12, 2008February 1, 2012 by Daniel Klotz

11 Problems You Can Solve in 2009: Part II – Journalism

The Harrisburg Patriot-News offered to buy out many of its employees in October, and many heavyweights took the offer, as Jersey Mike reported. It’s hard to get the full story, as Dennis Owens of ABC-27 in Harrisburg found out:

“One story you won’t see in the Patriot-News is the inside story about what’s going on. One person who took the buyout said they had to sign a non-disparagement clause – meaning they can’t talk about the buyout or risk losing it. The person did say there are a lot of sad people.”

Harrisburg isn’t alone—jobs are being cut at Lancaster Newspapers as well, and in hundreds of other local papers in the United States. John Grapper, writing in the Financial Times, wonders if local papers will survive. At best, he suggests, they will survive, but not as we know them today.

Allow me to introduce you to problem #2 you can solve in 2009 for fun and profit:

No. 2: Journalism

Problem: Local newspapers are shriveling.
Assets: There is a growing sense of community (and desire for it), and more readers and resources are online than ever before.

Daniel Victor, a reporter at the Patriot-News who didn’t take the buyout, has turned his blog into a think-tank on this subject. There is a thriving conversation among the South-Central PA twitterati on this subject. This morning, for instance, Jeff McCloud of Elizabethtown asked Daniel Victor,

“Won’t something else step in to take a newspaper’s place? Esp. if it’s a large org, such as the Patriot-News?”

"The American Newspaper Industry is Hale and Hearty," a Lancaster Newspaper Company display on South Queen Street erroneously states.

You’ll find a good group of other locals participating in the conversation on Twitter, including Andréa Cecil, web editor for the Central Penn Business Journal; her colleague Jessica Bair, a reporter; Scott Detrow, reporter for WITF-FM; Janet Pickel, online editor for the Patriot-News; and Tom Murse of the Lancaster New Era. David DeKok of the Patriot-News has also blogged on the subject.

In other words, there is no shortage of ideas or enthusiasm. What are needed, though, is an entrepreneur who can assess the current cultural and economic situation and develop a breakthrough way to match the assets with the problem. Will that entrepreneur be you or someone you know?

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Read Part I – Construction
Read Part III – Continuing Ed
Read Part IV – Lending

Posted on December 11, 2008February 1, 2012 by Daniel Klotz

11 Problems You Can Solve in 2009: Part I – Construction

The current recession will undoubtedly continue into 2009, perhaps bottoming out before summer and then resuming slow growth in the second half of the year.

Central Pennsylvania in general, and Lancaster in particular, will be rife with problems. But, there will also be surprising stability that many other areas of the country lacks. Part of that stability is the result of having valued our various assets conservatively—sometimes flat-out undervaluing them.

To the victor goes the spoils: Figure out how to turn these pairs of problems and assets into opportunities in 2009, and prepare for a very prosperous new year.

This is the first post in a series of eleven. Here’s the first pair; the other ten will follow soon.

No. 1: Construction

Problem: Construction is expected to grind to a halt.
Assets: Lots of skilled workers and lots of tools and equipment.

Photo by Flickr user robertpogorzelski

Financing for new construction projects has dried up, and few people are ready to take the risk of initiating those projects. Unfortunately, that is going to lead to a lot of skilled workers without work. There will also be a lot of tools and equipment sitting unused.

One obvious opportunity involves investments in public infrastructure. To get a slice of the money President-elect Obama is promising, we’ll need to show that we have shovel-ready projects where the plans and approvals are in place and people can be quickly put to work doing the actual building. Locally, the Lancaster Chamber of Commerce & Industry [disclosure: yes, that’s my employer] is already working to coordinate the efforts of state and federal legislators and other officials and back them with broad local support.

Aside from getting ahold of federal money to put construction workers and equipment to work, what opportunities do you see in this convergence of problem with assets?

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