Friday, January 30, 2015

Today’s Youth: A Generation Ready to be Found

These are some notes I wrote up for myself after Global News called and asked me to comment on youth unemployment (i.e., the job prospects for this year’s class of college and university graduates).

I'm not one of the doomsters who lament  “a Lost Generation.” I fell for that line (and reported it) two recessions ago. I kicked about it for years because the economy cycled on and found jobs for everyone who wanted them. The same thing will happen again. Except this generation has it better, because they already live in the digital future that businesses everywhere are working so hard to understand.

My interview in the Global Toronto newsroom lasted all of two minutes, so I thought I would share the rest of my thoughts on youth job prospects here.

They’re just notes. But feel free to comment.

I truly believe that young people entering the workforce have a chance to contribute significantly, and much earlier, than any generation before them.  The main reason is that they have grown up in the social, always-connected world of Internet media and mobile devices. There’s virtually no question that this is the key environment businesses must master over the next 10 or 20 years, but few business decision makers understand this milieu as well as the 20-somethings who have grown up in it. 

This puts new job-seekers in an enviable position.  They can hit the ground running in new jobs, rather than taking six months to a year to learn the ropes – as happened when previous generations came to work in organizations more stable over time.  To benefit from this advantage, however, job seekers have to be aware of it, and figure out how they can add value to an organization.

A few other ways that the Millennials have a better shot at new jobs than previous generations:
·       They understand business better.  Kids have been playing online games that require monetary transactions (real money, gold coins, life points, etc.) since kindergarten.  They understand limited budgets, deferred gratification, and know the difference between spending and investing.
      My own kids were playing Lemonade Stand when they were 10, which allowed them to choose how much they would spend on lemons and sugar and cups, and plan for how much they would buy on cloudy days or sunny days. So business decision making is nothing new to them.

·       They understand entrepreneurship.  Many kids online have been selling their know-how how for a long time.  I have met kids who create Wordpress websites, edit copy, curate photographs, create computer games and design logos. They understand how to create value and get paid.

·       They are social.  Young people they are very sharing and supportive of each other. They have high expectations for their work, but once they get there they will be very resourceful and creative collaborators, with their peers and with their elders.

·       They know how to find information.  The key challenge in most white collar positions is accessing the right information at the right time.  These kids know all the best search engines, they’re not just limited to Google, and they’re used to demanding – and finding - the right information at their fingertips.

·       Businesses today are embracing key performance indicators, measuring output, and generating productivity metrics.  Today’s kids are used to that; they all have hundreds of apps on the phone that speak to this new culture of digitizing every activity.  They can help businesses embrace new technologies to become more efficient, especially in non-tech areas like personal and professional services, construction, hospitality and government.

Also, the unemployment numbers for young people aged 20-24 are not as bad as most people think. Their unemployment rate is about 10%, which is pretty close to the long-term trend, and a big drop from about 13% five years ago. So things aren't as bad as we sometimes hear.

(The relevant chart is the second one in. But read the full myth-busting story if you have time.)

Where are we seeing job growth? What sectors are doing well?
Resources are having a bad time of it, but they will come back. Alternative energies will also do well. Non-profits and social enterprises are enjoying a new lease on life, led by Gen Y and millennials who are using technology and internet communications to rejuvenate these sectors and find new solutions to longstanding problems.

Education, social media, ecommerce, and marketing agencies are all promising. Many businesses need more hands-on help using and customizing technology, so that’s a huge and very lucrative area. And even old-fashioned brick and mortar retail is going to offer great opportunities. Target’s demise means millions of Canadians are looking for new places to spend their money.

And anyone who knows anything about sales can write their own ticket.

When a person graduates from university how should they go about finding a job?
Know what you can do. Develop specific skills: coding, apps, content creation, computer maintenance, hacking, whatever. Target the sectors and companies where you would like to work, and approach them with passion and confidence. Tell them how you can create value for them! (Be an investment, not a liability.)

When all else fails, make your own job. Buy and sell on eBay, resell cool technology from China, make your own jewelry or design websites, write an eye-catching blog and find sponsors for it. Buy a 3d printer and make stuff to sell to friends and gift shops. Do landscaping, cooking, snowshovelling, dogwalking, video production, tutoring and child care for clients with more money than time. There are more opportunities today than ever! 

Friday, January 23, 2015

January guide to getting your business in shape for a new year

My Financial Post column of Jan. 12, 2015:
Success in business rarely comes from building a better mousetrap, raising a million dollars on KickStarter, or landing a great-white-whale-sized account.
True success comes from getting the little things right: working your lists, managing cash, watching the competition, and never giving up. It won’t make headline news, but mastering the basics will at least keep your business off the obituary pages.
And January is the time most people look at developing better habits. “This stuff isn’t rocket science, but starting off the year properly is a good idea,” small-business consultant Andrew Patricio says. “It’s the details that make you a good business owner.”
As founder of Toronto-based BizLaunch, Patricio held an online webinar last week in which he offered numerous tips for mastering the basics and putting your business on track for a bigger and better year.
Here are a few of his key points:
— Conduct an expense audit to start managing expenses in your business. Year-end gives you an opportunity to spend more time than usual with your accountant, so Patricio suggests conducting an expense audit to find out where you’re spending too much.“Go through your P and L with your accountant and look at every single line item — advertising, office expenses, petty cash, whatever — and try and see where you can save money. I urge you, in January, to get [suppliers] to re-quote you on a lot of the expenses you’re incurring.”
— Another timely resolution is to try to understand your financial statements this year. “It’s really not that complicated,” Patricio insists. When businesses have weak balance sheets — too much debt, not enough equity or cash — it’s usually because the owners don’t understand their financials, so they don’t know how to improve them, he says. “It’s really the detail that makes you a better business owner,” Patricio says. “When you can look at the numbers and analyze them, they help you improve your business.” Once you understand your gross profit margin, for instance, you can see how you’re doing compared to industry averages, and compared with last year.
— Start setting more precise expense budgets. When it comes to many big-ticket categories, such as advertising, “we spend as we need, when we need,” Patricio says. “You need to become more strategic. You want to make sure your employees understand the effect of expenses on your bottom line, and that they don’t waste money. The only way they’ll do that is if you set specific budgets and timelines.”
— You knew this was coming: pay attention to cash-flow forecasts. “The one thing I’ve learned in 30 years in business is that you never ever want to run out of money,” Patricio says. “Understand that as a business owner, managing cash flow is the most important thing you do.”
— He advises all entrepreneurs to develop cash-flow forecasts for the next 12 months. Not only will this keep your company off the rocks, he says, it will ensure you have cash on hand in times of liquidity shortages, such as the next recession. “Once you know you have cash available to you, you can make much clearer decisions.”
— If you realize your business may need additional financial support over the next year or two, don’t wait, says Patricio – arrange your financing now. “Look for money long before you need it. Start doing your research six to 12 months ahead of time.”
— Have a business plan – and update it regularly. Sure, you’ve heard this before. You’ve probably also heard many successful entrepreneurs brag that they’ve never written a business plan. (Business moves too fast today, yadda yadda yadda.) Patricio doesn’t buy it, and neither should you. A business plan represents a vision of a business — all its inputs and outputs — at a specific point in time. Its value comes from regularly reviewing it to ensure you know which of your initial assumptions still hold true, and which need to be revisited. “A lot of business owners don’t like this part of the business,” Patricio says. “But it can be a really simple document that you use to keep yourself on track and focused.”
— Include first-hand industry research in your business planning, Patricio adds. “Go and see other businesses similar to yours, see how they’re doing and how much they’re charging. Look for the best practices in your industry and copy them.”
— Finally, Patricio addressed a common entrepreneurial pain point: How to start selling to big business. Polish up your benefits statement, he said: “I have found that big companies will let you come and meet with them only when you offer them real value.” Noting that many big enterprises are nervous about buying from small businesses, Patricio revealed BizLaunch’s strategy: convince the prospect to give you a minor project to start, and prove yourself with that.
As for getting through the gatekeepers to talk to executives, Patricio avoids the office altogether. “We tend to meet top-company people at a conference or trade show, so we’ve never had trouble with gatekeepers.”
“Be patient,” he concluded. “Getting into these companies is not hard, but it is a lot of fun. They have got the money to spend, and they want to give you the work. As long as you’re reliable and you produce the goods, they want to do business with you.”