Is there a small business malaise?

Four years after the end of the great recession, the U.S. economy is still just limping along, with GDP growth lately averaging barely above 1%. With small business being the perennial producer of over half of the economy and jobs, we wanted to know how things are looking for our small business audience. So in our online poll last week, we asked “What are your business growth plans for the rest of 2013?”

Only one-fifth of our respondents say they are growing and in an expansion mode, while forty percent are growing, but not enough to commit new investment. Almost one-third report no growth and no investment, and seven percent say their sales are declining, necessitating a cutback of expenses. Here’s another way to look at this response: four out of five small businesses are not making investments in the future, including half of this group who’re growing but not investing.

As you may know, I report on at least two scientific surveys of small businesses each month on my radio program, plus a number of other quarterly and semi-annual polls. Our unscientific online poll on small business owners’ attitude about the economy is consistently very close to the results of the others, which show that even for small businesses that are growing, there is little excitement about the future. Where are the start-ups that have been the hallmark of past recoveries? Where is the entrepreneurial excitement and hopefulness that have become no less than an icon of the American dream and the emotional fuel of the dynamism of our economy?

My take on this is that, sadly, we’ve got at least three more years of this condition. As long as there is anti-business rhetoric, policies and regulations coming out of Washington, there will be what we called in the last half of the 1970s, a kind of malaise–a lack of hopefulness and dullness in the marketplace.

How do we recover? What can small businesses do? Irrespective of political party, we have to support candidates who are pro-business and pro-free markets–those who don’t think the government should be picking business winners and losers, and those who realize that the key to a vibrant and growing U.S. economy is a vibrant and growing small business sector. And then, when the election comes, we have to show up and vote for those people.

We’ll have another chance in 2014 and again in 2016. And frankly, with the damage that’s already been done, I don’t know how much time we have left. The next two elections are critical to the future of small business.


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