Monthly Archive for June, 2012

Small Business Advocate Poll: Are we wishing our lives away?

The Question:
How much do you think the economy is being affected by businesses and consumers waiting to see who the next president is?

2% - Not at all

74% - A lot

24% - Probably somewhat

My Commentary:
Just as it seemed we might be getting some wind under the wings of this economy, it looks like it’s starting to lose altitude. Of course, there are many reasons, including high energy prices, high unemployment, loss of confidence in big banks, and the crisis in the Eurozone, just to name a few.

But the elephant in economic recovery’s living room is presidential politics. Never in my life - not even when Carter ran for reelection in 1980 - has there been such anxiety about who was going to be the next president.

We wanted to know just how big this issue was, so last week we asked you this question: “How much do you think the economy is being affected by businesses and consumers waiting to see who the next president is?” Here’s what you said.

A tiny part of our respondents - 2% - said “Not at all,” and a little less than one in four said the election is “Somewhat” influencing economic decisions. But the big group - 74% - said election anxiety was affecting business and consumer buying decisions “a lot.”

A long time ago I made the decision not to wish my life away, so I don’t want to start now. But I’m afraid my vote on this one goes with the majority. I’m ready to get this election over.


I talked about the economy and how it is affecting buying decisions by businesses and consumers on my radio show, The Small Business Advocate.  Click here to download or listen.

Check out more great SBA content HERE!

Take this week’s poll HERE!

The Small Bank–Small Business Cascade

America is exceptional for many reasons, not the least of which is the way our pioneer DNA morphed into entrepreneurship. But all DNA has to be nourished, and the food of entrepreneurship is capital.

As America’s pioneers claimed Manifest Destiny they simultaneously created businesses and markets, which were funded at first by sweat, blood and personal capital of the pioneer/entrepreneurs themselves. As businesses and markets grew, additional capital was needed, which was provided by another American invention: locally owned banks. Today we call them independent community banks (ICB).

There are a number of reasons America became the world economic leader. But no factor was more important than the financial, legal, regulatory and trust environment that fostered relationships between ICBs and small businesses. These two Main Street sectors formed a symbiosis that simply does not exist anywhere else on planet Earth. Indeed, without this symbiotic relationship, the twin pillars of the American Dream – home and business ownership – would not have been possible, nor would the financial foundation of American exceptionalism.

Alas, this unique relationship may be in peril. But not because of anything the two primary partners have done.

The financial crisis of 2008 shined a bright light on the behavior of large financial institutions, which had become too complex to regulate, too big to manage and, according to the government, too big to fail. But as the federal government and regulators attacked this crisis, ICBs are becoming collateral damage as the new regulatory regime does not differentiate enough between big banks and small ones.

It’s troubling enough to learn that existing ICBs are finding it difficult to manage under the new regulatory pressures, but that’s not the worst of it. Prior to 2008, when an ICB closed or was acquired by a larger bank, the marketplace would produce a new ICB to fill the newly vacated relationship-banking niche. But the following stats foretell an alarming trend.

According to the Independent Community Bankers of America (ICBA), there are 1,119 fewer ICBs today than in 2007. Only 96 new ICBs were chartered from 2008 to 2010, and since 2011, there have been no new ICB charters. Not one in 18 months! And if industry experts are correct, the net number of ICBs will continue to drop, ultimately to a dangerous level.

There are many causes of this alarming trend, but presently the biggest offender are the one-size-fits-all “solutions” being imposed by overreacting politicians, overreaching regulations and overzealous regulators.

In nature, when one member of a symbiotic relationship is diminished, the other is usually harmed too. Fewer independent community banks will result in a weakened small business sector. I call this trend The Small Bank–Small Business Cascade, and it must be stopped.

Small businesses are not only the backbone of the U.S. economy, they’re also the seedlings of future big businesses and the personification of the American Dream.

America, beware The Small Bank–Small Business Cascade.


I’ve talked with Mike Menzies, President of Easton Bank & Trust in Easton, Maryland about the dwindling number of independent community banks in the U.S. and the impact on small businesses. Click on one of the links below to download or listen.

The symbiosis of small banks and small businesses

Why fewer community banks is not good for small business

Check out more great SBA content HERE!

Small Business Advocate Poll: Is Obama Watching the Same Ballgame?

The Question:
In a press conference recently, President Obama reported that, “The private sector is doing fine.” What do you think about this appraisal?

0% - He’s right. The economy is fine.

68% - He’s wrong. What game is he watching?

32% - It’s not all bad, but it’s not good, either.

My Commentary:
We’ve all said things we would like to retrace, perhaps as soon as the words clear our lips. No doubt this happened to President Obama last week when he said, now famously, “The private sector is doing fine.”

I was watching his speech as he said those words and, frankly, my jaw dropped. Was it just an ill-phrased, extemporaneous thought? Were those words written for him to read? Does he really believe that?

For the past two years, periodically we’ve polled our audience about the condition of the economy. The results have pretty much been the same every time: less than one-fourth are doing well, less than one-fourth are not doing well, and the half in the middle are doing just okay. That means about three-fourths of our respondents have consistently reported less-than-desirable business conditions.

But when we polled our online audience recently about their response to President Obama’s appraisal of the private sector economy, not one person agreed with him. Not even, apparently, the one-fourth of our respondents who have consistently reported favorable business conditions. Almost seven of ten of our sample said, “He’s wrong. What game is he watching?” And the rest, 32%, said, “It’s not all bad, but it’s not good, either.”

There are only three reasons why the President would say something like this at this point in time: 1) He misspoke; 2) his remark was out of context; or 3) he is out of touch with the economic reality. Frankly, since he is very smart, a pretty good politician and has a world-class political team around him, it’s difficult to imagine that he would misspeak or not avoid being taken out of context on THE issue that is likely to decide the election.

One thing is certain: President Obama has now burned the first two excuses. From now to November 6, voter scrutiny regarding the economy will be based on one question: Is he watching the same ballgame as the rest of us?

Check out more great SBA content HERE!

Take this week’s poll HERE!

Blasingame’s Law of Sales Pipelines

Selling is a numbers game. Do you know how to manage your sales to plan future revenue? Watch as Jim explains the sales pipeline and how to use it to forecast sales, revenue and cash flow.

Watch more of Jim’s videos HERE!

Take this week’s poll HERE!

Check out more great SBA content HERE!

A father’s tough love is the harder job

As the father of an adult daughter and son, plus the grandfather of four knucklehead boys, I’ve learned some things about love.

All the hours logged as Dad and Poppy have often caused me to contemplate how different are the roles of mother and father, especially in the overt demonstration of parental love. It’s fascinating how the manifestation of this love differs between mother and father – biologically, emotionally and experientially.

A mother’s love, at once sweet and fierce, is observed in almost all animals, not just humans. No doubt you’ve heard this metaphor: “… as sweet as a mother’s love,” and this warning: “Don’t get between a momma bear and her cub.”

I have been the recipient of this kind of love and have witnessed it, and there truly is no other force in nature like it. But it has troubled me that there are no corresponding references for a father’s love. Could this be why Father’s Day is not quite as big a deal as Mother’s Day? I’m just saying …

A human father’s love is more often associated with words that are unfortunate, like “tough” and “discipline.” As a teenager, my own father once apologized to me when he thought his demonstration of love might seem “hard-boiled.”

Mothers occupy the pinnacle of parental love – with justification. And not to take anything away from them, but since a mother’s sweet love is as primal as the miracle of birth, they don’t have to work too hard to deliver it. But there’s a uniqueness about a father’s love that deserves a better rap. Here are two reasons:

  • Unlike a mother’s sweet love, a father’s tough love does not exist outside of homo sapiens.
  • When a father’s parental toughness is required, especially when applied to an indignant recipient (read: teenager), it requires a love that has found the courage to endure a negative response and a willingness to defer gratification – sometimes for years.

No one is more keenly aware of the distinction between these two demonstrations of love than a single parent, where both kinds are required of the same person, perhaps within minutes.

Mothers, please forgive any paternal bias you may detect, but here is my conclusion about parental love: The only force in the universe that comes close to a mother’s sweet love is a father’s tough love. But the latter is the harder job, and the return on investment almost always takes longer.

Happy Father’s Day, Dads. You’ve earned it.

Check out more great SBA content HERE!

Take this week’s poll HERE!

Small Business Advocate Poll: National Bank, Independent Bank, or Credit Union?

The Question:
With which of these three do you have your primary business banking relationship?

60% - National or large regional bank

36% - Independent community bank

4% - Credit union

My Comments:
In our most recent online poll, over 60% of respondents to our most recent poll chose “National or large regional bank” as the financial organization they have their primary relationship with. A little more than a third chose, “Independent community bank,” and only 5% said “Credit union.”

As you may know, for most of two decades, I’ve advised small business owners that not only should one of their banking relationships be with an independent community bank, it should be their primary bank - the one that has your deposit account and is your go-to bank for a business loan.

Blasingame’s 2nd Law of Small Business states: It’s redundant to say “undercapitalized small business.” This truth is why small businesses need a bank relationship that’s heavy on the relationship part; with a bank that has one of its founding principles to serve small businesses in the community, including making local loan decisions by humans, not computers.

I never said there was anything wrong with the big banks. In fact, I have recommended that small businesses should have a second relationship with a larger bank. One good reason is because if your business grows to a point where you have multi-millions in annual revenue, you could outgrow your beloved community bank and that’s when only a large regional or national bank will do.

But my advice to maintain a relationship with a locally-owned and governed community bank turned to prophecy when, in 2008, the national chain banks and the large regionals got caught up in the financial crisis and they basically abandoned small businesses. They didn’t do this to be mean; they did it to survive.

Big banks are trying really hard to recover the ground they’ve lost in the past three years, so perhaps their plan is working. Also, loan demand by small businesses is still very low, so the computer-generated, credit-scoring method of loan evaluation practiced by the big banks is not yet putting pressure on these relationships.

Nevertheless, I still believe that, regardless of any other banking relationship, a small business should have an active relationship with an independent community bank - if for no other reason than long-term survival.

Recently on The Small Business Advocate Show I talked with my friend and Brain Trust member, Mike Menzies, President of Easton Bank & Trust in Easton, Maryland about the independent community bank landscape and how independent banks are faring in this economy. Click on one of the links below to listen or download.

The economy, small businesses and independent banks

The independent community bank landscape

Check out more great SBA content HERE!

Take this week’s poll HERE!

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