Many small firms not Y2k ready : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Many small firms not Y2K-ready

By Jane Larson The Arizona Republic Dec. 3, 1999

Up to 1.5 million small businesses, nearly two-thirds more than previously estimated, will enter the new year unprepared for Y2K, according to a survey being released today.

The results surprised pollsters at the National Federation of Independent Business, which has tracked small firms' Y2K attitudes since April 1998.

About 10 percent of firms with one to 99 employees said back in April that they were planning to address the computer problem. But the latest survey, done in October, showed that virtually none of them had done so.

That boosted the foundation's estimate of unprepared firms to 1.25 million to 1.5 million companies, or 26 percent of firms, from 850,000 back in April.

About 48 percent of small firms said they had taken action on Y2K, and an additional 4 percent said they plan to.

William Dennis, senior research fellow for the NFIB, speculated that many firms took action months ago when their banks and big customers were sending out letters asking for proof of Y2K compliance.

Despite the sheer numbers of unprepared firms, Dennis said there is some good news. Most of those firms tend to be small, with one to four employees, and their operations tend to be less dependent on computers.

-- Homer Beanfang (, December 03, 1999


Link Many small businesses doing little about Y2K

By FINN BULLERS - The Kansas City Star Date: 12/02/99 22:15

Many small businesses will be taking their chances when the clock strikes midnight on New Year's Eve.

Up to a third of the nation's small firms -- some 1.5 million -- will have taken no action by Jan. 1 to prevent a Y2K computer glitch, according to a new study that will be released today by the National Federation of Independent Business.

As a result, many businesses with 100 employees or fewer may begin finding problems in anything from inventory software to security systems when they open their doors Jan. 3, experts say.

It's hard to tell at this point how many businesses might fail, said Jim Weidman, a spokesman for the business federation.

"It does not immediately create a doomsday scenario for small business or the economy," Weidman said.

"Y2K is going make their lives more difficult, but small businesses have a great amount of faith in their ability to muddle through and triumph over adversity."

A number of small business owners in Kansas City say they are doing little or nothing to prepare for Y2K, but they aren't worried.

"I never bought into the Y2K thing," said Gregg Katz, who employs six people at his flower shop, Al Manning Florists in Kansas City, Kan. He has checked for glitches by programming his computers to think it's the year 2010, and so far he has not lost a sale.

"If anything, small businesses are more protected from Y2K than big companies because we're not so intertangled with multiple networks," Katz said.

A lot of small business owners appear to agree with Katz.

In fact, in the last six months the independent business federation has almost doubled its estimate of the number of small firms that won't be ready for Y2K.

"Such inaction is stunning given the broad national publicity," according to a report on the survey written by William J. Dennis Jr. of the National Federation of Independent Business education foundation.

"Business owners effectively said that they didn't believe the `Millennium Bug.' "

Business owners tell Barb Engel, executive director of the South Kansas City Chamber of Commerce, that they're sick to death of the whole topic.

"As a society we're just tuning it out," Engel said.

Case in point: The federal loan program designed to help cash-strapped small businesses prepare for Y2K. To date, only $6.3 million of an estimated $500 million loan pool has been awarded -- including five loans in Missouri and none in Kansas.

In addition, dozens of U.S. Small Business Administration Y2K workshops have been scuttled because of a lack of interest.

It's not for lack of numbers. In Kansas City alone, 97 percent of the 47,097 area businesses employ 100 or fewer employees.

But some small business owners say their firms are too tiny and unsophisticated to suffer catastrophic damage from a computer meltdown.

"We haven't been concerned with Y2K at all," says Mike Garry, who employs four workers when business is good at his South Kansas City Direct Casket Outlet and Graphics Plus store. His sole computer is an Apple Macintosh, a brand free from Year 2000 worries.

Experts agree that the smaller the firm, the less dependent they generally are on computers.

But the failure of machinery, a billing system or payroll software could be serious enough in a small business to cause the firm to fail, experts say.

Even a short disruption could allow a Y2K-ready competitor to cold call customers looking to steal accounts.

Small businesses aren't oblivious to the risks. In some cases, the cost of preparing for Y2K is just too great.

"It's one of those things you can easily turn a blind eye to and cross your fingers and hope for the best," said Greg Wald, owner of All Nations Flag Co. of Kansas City, which employs nine workers.

"Many small businesses are just trying to put out the daily brush fires and are hard pressed to look down the road."

Indeed, the smaller the firm, the less likely it is to be prepared, according to the survey, which was based on an October Gallup telephone poll.

Those who do act usually find Y2K preparations cost relatively little, the report says. Seventy percent spent less than $5,000, a sum generally within their annual operating budget for computer hardware, software and maintenance.

Free help is also out there, says Margaret Anderson with the nonprofit Center for Y2K & Society in Washington, D.C. She has a long list of volunteer computer experts ready to repair equipment for small businesses, but virtually no takers.

"Lots of people just don't want to admit to themselves that this is something they should think about," Anderson said.

But Sam Gromowsky has spent $26,000 since April to prepare his business, Almar Printing in the Waldo area. He's replaced the 10, 4-year-old personal computers at his 15-person shop.

"I've taken prudent steps and I don't have a lot of fear because I don't fear anything I have no control over," he said.

National Federation of Independent Business NFIB state directors in Missouri and Kansas say business owners are taking a wait-and-see approach. If computer glitches occur, business owners say, they will fix the problems after Jan. 1.

If the sole computer at Drake-Scruggs Equipment Inc. of Grandview goes down, the 20-worker firm will simply replace it in January, said Bob Coshun, branch manager for the truck parts distributor.

"It's really no big deal," Coshun said.

Roger Holmes, an owner of A.H. Tannery of Kansas City, which employs 50 workers, will take a similar approach in the firm's 12 tanning salons.

"Y2K is a nonissue," he said. "And if there are problems, we'll deal with them as they come up."

In some cases that might work, especially if you can buy your equipment and software off the shelf, experts say. But don't count on being able to quickly find computer consultants to rewrite your software or repair your network, they say.

"You're not going to be able to find someone to upgrade your network software when you come in to work on Jan. 3 and find out it isn't working," said computer consultant Don Weiss, president of Step 1 Inc. of Overland Park.

With less than a month until Jan. 1, small business owners still have time to make hard copies of financial records, upgrade software, check critical systems and make contingency plans, Weiss said.

But don't wait too much longer, said John Koskinen, chairman of the President's Council on Year 2000 Conversion.

"If you're a small company that decides to wait and does not get it fixed in time, our position is, `That's life,' " Koskinen said. "Any business that takes this attitude is basically running out of time."

-- Homer Beanfang (, December 03, 1999.

Many of the 1 to 4 employee firms can soldier along using 3 part forms (White for the cash drawer, yellow for the customer's receipt, pink for production) at least for a while. Heck, I know of a bowling center that operated for a day, successfully, using 3 part forms while their old point of sale computers were ripped out and replaced with Y2K compliant ones...several large leagues were accomodated this way. Sure, the employees HATED it, but it can be done when push comes to shove.

It's the larger 15 to 45 employee outfits that may have trouble with these manual workarounds.

-- K. Stevens (kstevens@ It's ALL going away in, December 03, 1999.

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