Entrepreneurs in Northeast Ohio are upbeat and optimistic about the local economy and encouraged about where it may be headed, says Keith Strauss, president of both EO (Entrepreneurs’ Organization) Cleveland and Sales Concepts Inc.
“A couple pockets may be looking at some longer-term concerns,” Strauss says. “But the job market being where it is, the economy, the cost of capital — there are a lot of positive things happening right now. It seems like a lot of companies are growing and hiring more people. The hope is that this trend continues.”
More than 60 entrepreneurs from Cleveland participated in the Cleveland Global Entrepreneur Indicator, a semi-annual survey conducted last spring by EO.
Here are a few highlights:
■ Ninety-one percent of entrepreneurs surveyed expect the current economic environment to improve or stay the same. That’s up 10.1 percent compared to the August 2016 survey.
■ When asked if they would be willing to start a new business right now, 100 percent indicated they would, a nearly 15 percent increase over August 2016.
■ A total of 77.8 percent of respondents anticipate higher net profits this year, compared to 56.4 percent in the last survey.
■ When it comes to hiring more full-time employees, 66.7 percent of those surveyed said they would be willing to do so, up from 50.9 percent last year.
■ When asked to look beyond Cleveland, 61.9 percent of the entrepreneurs polled believe that the nation’s economy will improve, up from 23.6 percent in the August survey.
EO Cleveland has 155 members with 6,607 combined employees and a median income of $2.1 million in annual sales.
“In our region, manufacturing is still key and fairly strong,” Strauss says. “Housing is a whole lot stronger than it had been and the ancillary suppliers and service providers that feed off of those two big pieces of the economy are doing well.”
Strauss isn’t quite as bullish on his own company’s future, but it’s still doing OK.
“I’m in sales training, so we’re a little counter to what’s happening,” he says. “Most of my clients are doing well and when the economy is down, we get more inquiries and more people reaching out saying they need help. I can see a definite falloff in people raising their hands and saying they need help in their business. That’s usually a good indicator that the economy is doing well and people are readily spending money.”
The tech effect
Technology has dramatically changed the path to becoming an entrepreneur, Strauss says.
“There is a less of a barrier to entry today to start a business,” he says. “It can be as simple as getting a domain name and putting something out there. You could be virtual or offshore with your employees. People can find a programmer in India to create an entire website for $20 or $200 while doing that here might be $20,000.
“Economies of scale are totally different. But if you’re not the newest and most different idea, if you haven’t gotten the corner on Instagram or Facebook or however else you’re drawing people to that web base, it lacks stickiness.”
There are still inherent advantages to having a brick-and-mortar location when it comes to building a loyal following for your business.
“Take a restaurant,” Strauss says. “The servers take good care of you, the menu is always changing, the food is good and comes out in a reasonable time and it’s a good atmosphere. In the old days, it cost more money to get into business and it took more time to get established. But when people have a nice experience, they continue to come back. Today, you might put something out there, it becomes the next big thing and then it’s gone. You don’t hear about it anymore.”
Strauss references the story of an entrepreneur who now works for one of his clients as an example of the challenges that come with building a business in today’s world.
“He’s done two startups and you can tell he is extremely intelligent,” he says. “When I talked to the owner, I asked, ‘How did he end up working with you?’ He said he thinks he just got burned out. You’re running as fast as you can trying to please investors and trying to raise money.
“At the end of the day, there are another 50 or 100 people doing the same thing. If you can get into a more traditional company and have interaction with employees and customers, you can use your business savvy to build something that is sustainable and can be replicated and have some ongoing revenue to it as opposed to something that is out there and you just hope to cash in big.”
People need jobs
Strauss believes entrepreneurs will continue to grow and evolve, but will never go completely digital — if for no other reason than pure necessity. If everything is digital and no one ever has to leave their home for anything, what would become of all the people who work in the many shops and stores that still exist today?
“One of the arguments I hear against a flat tax is what are you going to do with all those accountants and people who make their livelihood doing tax work?” he says. “I don’t think even if the technology enabled us to, that we could totally eliminate salespeople or all small business. Think about the scope of all the people and all the money and all the livelihoods. What do you do with all those people?” ●