SOUTH BURLINGTON — Vermonters looking to get a better understanding of how their businesses can handle complex political, economic and sociological trends got their chance at a workshop held last week at the Delta Hotel.
The workshop, which took place Oct. 9 and was hosted by the Vermont chapter of the American Society for Quality, challenged industry leaders to assess local and global issues as they plan for business development.
Led by the group’s Dan Feliciano, attendees walked through the “PESTLE” business assessment. The acronym stands for political, economic, sociological, technological, legal and environmental challenges.
“It’s gonna open your mind up to different possibilities that you haven’t thought of before,” Feliciano told his audience.
The speaker kicked off the event with eye-opening statistics that paint a less-than-rosy picture for the business climate. For example, Feliciano said 60 percent of new businesses fail in just four years. Cash-flow issues are the main culprit for 80 percent of business failures, and bank lending is down, so it’s getting harder for startups to gather capital. Businesses that fail within their first few years tend to have a net-negative impact on the economy.
“Very few of them actually pay taxes or hire employees,” Feliciano said.
In recent years, Vermont has been trending towards making companies employee-owned. Gov. Phil Scott even declared October to be “Employee Ownership Month.” But despite the hype, Feliciano said the concept needs a reality check.
“The books are in such poor shape, the equipment is outdated, and I don’t know anybody who wants their money to support these businesses,” he said.
Other statistics discussed at the workshop show the challenges of running a small business. Forty percent of small businesses make a profit, 30 percent break even, and 30 percent are losing money.
It’s not all sour news, however — the fastest-growing business is the service industry, and the foodservice industry is growing 11 percent. Health, beauty, and fitness are up 10 percent, and retail is up 7 percent. Home services are up 6 percent.
During the group walk-through of PESTLE, Feliciano gave examples for each category. For example, the political assessment includes examining the press, rule of law, bureaucracy, corruption, regulation and taxes.
In this category, the speaker cited Dicks Sporting Goods as an example — the company recently destroyed $5 million worth of guns to gain approval in the political environment, but the company also faced a backlash.
“Those kinds of things, you need to know how they are going to affect you now and in the future,” he said.
On the economic front, Feliciano said, one must consider people’s disposable income, cash flow, costs, even tariffs.
“If there are tariffs on milk, cheese, wine … we have these products,” Feliciano said.
On the sociological front, the group discussed migration trends both in and out of the state. One trend is young people love city life.
“The thought is that since the millennials are more inclined not to want to own a home, but they want to have to have experiences, they are going to migrate to these megacities,” he said.
But he noted that Vermont doesn’t have megacities that allow the state to benefit from that trend.
He also said businesses should be aware of technology trends, such as 5G high-speed wireless, and environmental trends including water quality issues and the push for electric vehicles.
Charles Poso, the chair of the Pittsfield Selectboard and a worker in the health care, said the issue of demographics stood out to him as critical to his industry.
“Vermont is an aging demographic,” he said. “It’s a demographic with a lot of comorbidities that increase healthcare costs exponentially. Those things affect everything from the mom-and-pop business, the ability to bring money in, hours worked, things like that.”
John Klar, an attorney and farmer residing in Brookfield, shared why he attended the workshop.
“I want to know what’s going on in the state of Vermont. It’s becoming more and more complex,” he said. “I particularly have some areas of interest with regard to the minimum wage and some of the other issues facing Vermont.”
Michael Bielawski is a reporter for True North Reports. Send him news tips at firstname.lastname@example.org and follow him on Twitter @TrueNorthMikeB.