Tag Archive for 'economic recovery'

Next Main Street movie: “Small Business Shrugged”

At this moment four years ago we were in the middle of The Great Recession whirlwind. We didn’t know how bad things were going to get because all of the shoes had not dropped in reaction to the financial crisis. Millions were still being laid off, GM and Chrysler had not yet taken bankruptcy and the federal government was injecting the first of trillions of dollars into a shell-shocked economy.

Today, 43 months after the technical end of The Great Recession, surveys I report about on my radio program (NFIB, Tatum, our online poll, etc.), indicate that about a fifth of small businesses are doing well, about as many are doing poorly, and the middle 60% are doing just okay. This economy should be a rising tide floating all boats; but it isn’t. Instead, as in 2009, every small business owner is still anxious about the next 12 months.

During recoveries of past recessions, concerns were about market dynamics created by the usual suspects: inflation, global trade, supply and demand, technology disruptions, fear and greed, etc. But this not-so-great recovery is different.

For the first time in my long career (seven recessions), the origin of what will wake up small business owners at 3am in 2013 are mostly challenges created by the federal government. Here’s the short list: higher taxes; unsustainable budget deficits and debt; hundreds of Obamacare mandates, regulations, penalties and taxes (Galen Institute); thousands of new 2013 regulations costing businesses $123 billion, plus 13.6 million compliance man-hours (American Action Forum).

But alas, there is one more thing which may be more troubling to this market sector that produces over half of the U.S. economy: A zero-sum philosophy coming from Washington that the financial success of “fortunate” Americans is at the expense of others. But successful entrepreneurs are only fortunate because, like every American, they have a Constitutional right to pursue success, not a guarantee of success.

Small businesses take economic headwinds in stride because they know the marketplace is self-healing with the passage of time. But government-created headwinds not only don’t heal, they compound, and this truth does not motivate small business owners to take risks.

Most small business owners want to grow and hire, but they don’t have to. So far, that’s not a government mandate. The next movie the political class may see playing on Main Street could be titled, “Small Business Shrugged.”

Eventually government expansion and economic expansion become mutually exclusive.


This week on The Small Business Advocate Show I talked more about America’s lack of small business optimism and why political policies are to blame for the slow economic recovery. Click here to download or listen. Afterward, please let me know what you think.

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Take this week’s poll HERE!

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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!

Small business economics

Two years after the technical end of the Great Recession, the U.S. economy is still struggling to recover. It’s clear that the residual of the causes of this downturn have yet to be absorbed. In fact, GDP growth for 2011 is tracking at a slower pace than last year.

As we’ve done periodically in the past year, we recently asked our audiences about their experience in the economy right now. We asked, “Based on your small business right now, which of the following most closely fits the economic conditions you’re experiencing?”

The first choice, “Up - our business is good,” was chosen by barely more than one in ten of our respondents. This is pretty close to the top response in the last poll we took.

The middle question, “Flat - we’re doing okay, but growth is slow,” was the big group, coming in at 65% of our sample. The last options, “Down - we’re barely holding on,” was admitted by almost one-fourth of our respondents.

With almost 90% percent of our poll participants reporting either slow or no growth, this, unfortunately seems to track pretty close with other polls I report about on my radio program, The Small Business Advocate Show, as well as the national economic indicators.

It’s clear to me that the U.S. economy is not going to grow until small businesses are able to grow.  What part of this is lost on the so-called leaders in Washington who are doing more than anyone to dampen the enthusiasm of America’s marketplace heroes, small business owners?

How do you feel about what our political leaders are doing to stimulate the economy?

I talked more about the economy and small business on my radio program, The Small Business Advocate. Take a few minutes to listen…

Whose policies are responsible for the slow economy?

The end of this month is the second anniversary of the technical end of the Great Recession.  Alas, what I have called the not-so-great recovery has been so not-great that for many, the technical end date is nothing more than a data-point with little correspondence to what’s happening in real life.

Some of the unemployment stats are at or near records, with millions of Americans cyclically or structurally out of work, many chronically so. One-fourth of homeowners with mortgages are upside-down, a term for when you owe more than the underlying asset. And now, almost three years after the financial meltdown of 2008, the economy is softening to the point that some talking heads are talking another recession - the dreaded “double dip.”

Clearly, many of our problems have been brought on by digital greed and not a little marketplace malfeasance. As that legendary possum philosopher, Pogo, once said, “We have seen the enemy, and he is us.” But it’s just as clear that the political class has to answer for their bumblings, bad policies and political non-leadership.

We wanted to know how our audience felt about how much of our pain can be attributed to that person upon whose desk the Harry Truman buck stops.  So last week, in our poll question on the website and in the Newsletter, we asked, “Whose policies do you think are more responsible for the current painfully slow economy?”

Those who thought our economic woes were “… more of a residual of President Bush’s policies,” represented 15% of our respondents.  A little less than 40% said, “After 2.5 years, this is President Obama’s economy.”  But the big number - almost half - said, “I blame the policies of both administrations.”

One of the ways politicians get re-elected is to make us feel that they have the answers to our problems and, given the chance, will fix them. But that sword has two edges and the other side cuts deeper with accountability for perceived, if not real, mistakes.

In Shakespeare’s play, Julius Caesar, Mark Anthony’s eulogy of Caesar includes this passage: “The evil that men do lives after them; the good is oft interred with their bones.”

And so it is to this day.

Click here to take this week’s poll on government regulations.

Surviving the not-so-great recovery

After the technical end of the Great Recession in the summer of 2009, I predicted the letter that would most accurately describe this recovery is not a “U,” an “L” or even a “W,” but rather, an “M” – for marathon. After working in six previous recessions, to me everything pointed to a very long and grinding economic period.

Alas, my prediction has come to pass. Seven quarters into the not-so-great recovery, GDP for Q1 2011 came in at only 1.8%, which caused economists, who had earlier projected 2011 growth of at least 3% for the year, to lower their expectations.

We wanted to know what our small business audience thought about the economy, so for the third time in a year we used our online survey to ask, “What does the economy look like for your small business for 2011?” Here are the three options, with each response followed by how similar questions were answered previously.

Those who said, “We’re experiencing solid growth and expect the same through 2011,” represented 14% of respondents. In the previous survey, 29% were this optimistic.

The next choice, “Our growth is similar to the national trend – up, but barely,” was chosen by 40% of our sample, which is very close to the 43% choosing a similar option in the previous survey. Unfortunately, 46% of our respondents said, “It still feels like a recession,” which is up from 28% making this choice in the previous poll.

Our survey, while unscientific, is supported by others that are: The NFIB small business survey indicated optimism declined again in April, and the Tatum, LLC survey has been reporting more red arrows than green ones all year. Clearly, overall small business economic sentiment has eroded.

But sentiment shmentiment! As the CEO of your small business, it’s your job to balance the force of entrepreneurial optimism with the gravity of economic reality. That means:

• Giving every customer the maximum opportunity to do business with you while serving that customer with maximum efficiency.

• Combining your service “special sauce” with every technological innovation you can find.

• Keeping your team motivated and inspired while running the most deliberate, disciplined and methodical business marathon of your life.

• Believing that it’s okay to fall in love with what you do, but not with how you do it.

Remember the ten most powerful two-letter words:  If it is to be, it is up to me.

Recently on my radio program, The Small Business Advocate Show, I talked more about how small businesses feel about this marathon recovery. Take a few minutes to listen and leave your comments on the recovery.

Future Employee Planning

The Question: What is the likelihood that you will hire at least one person this year?

50% - We will definitely be hiring this year.

22% - If the economy improves we will have to hire.

28% - We will not be adding any employees this year.

Jim’s comment:
America needs new jobs. We wanted to check on the hiring attitude of our small business audience, so we asked this question: “What is the likelihood that you will hire at least one person this year?” The news was encouraging.

Fully half of our respondents said, “We will definitely be hiring this year.” America needs more CEOs drinking this Kool-Aid.

A little over one in five of our sample said, “If the economy improves we will have to hire.” Perhaps the employment leadership of the first group will encourage these folks in the middle to find hiring confidence.

The last group, representing a little more than a quarter of our sample, said, “We will not be adding any employees this year.”

Considering where unemployment is, plus all the other headwinds pushing back on economic recovery, I am encouraged by the response this week. You go, small business owners. America - and the world - really needs you right now.

To participate in this weeks poll on mobile phones, click here.

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