By Gene Marks
Good news for small business:
Things aren’t as bad as they seem
us this for
In 410 AD, the Visigoths laid siege to Rome, eventually sacking the city and raping and killing thousands of its inhabitants. In the
14th century, the Bubonic plague was responsible for an estimated 100 million deaths
across Europe, or 30 percent of the population. Over the course of 100 days in 1994, an
estimated 800,000 citizens were murdered in
Rwanda as a result of ethnic infighting. And
over the past four months, Pittsburgh Pirates
fans have watched their team lose more
games than any other team in baseball.
Sure, business owners are deeply concerned about rising deficits and the prospect
of higher taxes. Yes, we’re uncomfortable
with the future effects of health care reform.
Of course, we’re struggling to manage and
generate profits in an environment of flat demand. But we’re not fleeing from the Nazis or
hoarding bread while an army of Normans
lays siege to our city. We’re not under occupation by a foreign army or being forced
to convert to another religion. And most of
us are lucky enough to not be living in Pittsburgh, either.
Things aren’t great. But they’re not terrible.
In fact, there’s actually some good news for
managers of small businesses.
For starters, there’s a change in the political winds. I don’t question our president’s
motives or good intentions. But over the past
two years, his administration, with Congress’
backing, has spent an unprecedented amount
of money and created massive deficits.
Most Pirates’ fans won’t find this as bad as
the Aramis Ramirez trade. But these policies
have unnerved the small-business owners
I know and have caused many of us to hold
back on hiring more people or making capital
investments. Two things will happen for sure
this fall: The Pirates’ players will be watching
post-season games from their homes; and the
Republicans will gain back significant seats in
the House and Senate. Our forefathers created a system of checks and balances for a reason. One political party running roughshod
can only result in mischief. This should slow
down legislation and hold back spending.
Speaking of spending, did you know that
the Pirates only pay $400,000 to Charlie Mor-
Gene Marks, CPA, runs a 10-person technology consulting firm in Bala Cynwyd, Pa. His
latest book is In God We Trust, All Others Pay
Cash: Simple Lessons from Smart Business
ton, arguably one of the league’s worst pitchers (at the time of this writing, Morton has
thrown 46-2/3 innings and allowed a whopping 75 hits, 52 earned runs and 13 homers).
That’s peanuts compared to others. I wish I
could say the same for our government.
A trillion dollars has been spent on arguably one of the world’s worst stimulus plans.
That ain’t peanuts. Even so — somehow,
someway, the Federal Reserve has managed
to keep interest rates and inflation at historical lows. This is good news too. For those of
us able to borrow, money is cheap. We can
lock in at low, low rates. And although we’re
not earning much in our savings accounts,
we can take comfort that the value of our
cash is barely declining. We can hold back
on significant raises. We can keep our prices
in check. Unlike those trying to make a buck
in hyperinflationary places, we don’t have to
consider inflation and interest in our business dealings right now. Which means we
have a little less to complain about.
But, like Pirates fans, small-business owners like to complain.
Some like to complain that they’re unable
to get financing like they could a few years
ago. That’s not something to complain about.
Having a losing record for 18 seasons in a row
is something to complain about. I say it was
too easy to get financing a few years ago. Due
to recent reforms and the overall public mood,
today’s banks are lending less frequently and
putting their potential customers through the
kind of due diligence that they should have
been doing in the first place. They’re asking for financial statements, checking up on
credit history and getting more involved in
their customers’ affairs. This is a good thing.
Bankers are making more responsible loans.
They’re not allowed to make as many risky
investments. They’re back to … banking. And
small-business owners who qualify are only
getting the financing that makes sense and
not over-extending themselves. Too many
business owners in the past 10 years were
given too much free money … and found
themselves in dire straits when they realized
they couldn’t pay it all back.
High unemployment creates pressure on
the government and reduces consumer de-
mand. But it also creates a buyer’s market for
business owners looking to hire new people.
I recently advertised for a part-time market-
ing assistant on Craigslist and got over 200
applicants. Why, even a few players from
the Pirates applied. So that’s good news for
a business owner. There are plenty of smart
people out there looking for jobs. I haven’t
heard a business owner complain about a
tight job market in years. Now, if you need an
experienced worker, you just go out and find
one. And if you’re spooked by health care re-
form or the government’s spending and don’t
want to bring on another employee, you can
just have your existing employees work more.
They’re terrified of losing their jobs and are
happy to take on the extra responsibilities.