Pissed-Off Small Business Owners to the Rescue

In the five-year existence of NY REPORT, we have never gotten involved in political editorial or even small business advocacy.  Our mission is to deliver how-to content from experts to help business owners increase revenue, reduce costs and build value, and I never wanted to lose that focus. However, in the current economic situation, it is impossible to stay true to our mission without getting involved. 

I am still an optimistic entrepreneur, but I am also really furious.  I am not furious about the fact that the economy is bad; economies go up and down in cycles. I understand that the recent — and future — government bailouts are necessary to protect the economy from cratering. But small businesses are paying the bill while many high-level banking and financial services executives who were responsible for making the economic situation much worse have made their money. More specifically, I don’t care if these executives made loans to people that they shouldn’t have or invested in financial instruments that they didn’t understand. I do care that they personally made millions while they helped exacerbate a bad economy and we (via the government) have to bail their companies out. Do you know what happens when small business owners take a big risk and it doesn't work out? We go out of business. In addition, the typical business owner will be personally on the hook for the company’s debt. There is no push from lobbyists to bail us out.  Actually, now that I think about it, a small business doesn’t even have to take a risk to go out of business. The deepened recession due to the reasons and perpetrators I mentioned above combined with the nearly frozen debt market can put a good company out of business. Talk about irony.

And the government hasn’t helped.  Among other things, it encouraged financial companies to make loans to people who couldn’t afford them. Now, the government is making the situation harder on us by writing new tax proposals (e.g., MTA’s payroll tax hike), increasing enforcement (e.g., state audits to find incremental revenue), and proposing more pro-union rules (e.g., revising the union ballot legislation). This seems counterproductive considering that half the country’s private sector workforce is employed by small business and it is Main Street that will drive the GDP as well as create the most new jobs in 2009.

The media is not helping much either. The truth is bad news sells, and that is what the media is selling us now. By focusing on the bad news, they are making the situation worse by perpetuating fear.  Without question, these are tough times, but all news is not bad news.  I know plenty of business owners who believe they will continue to grow in 2009. Somehow these stories never make the papers, let alone the front page.

What can you do? There are several advocacy organizations that focus on small business, such as the NFIB and the Small Business & Entrepreneurship Council. Also, as Jim Blasingame said in our December issue, stop watching the talking heads on TV and start calling your customers more often to ask how you can help them. At NY REPORT we will continue to provide expert content to help you protect and grow your business in the magazine (see our January "Success Guide"), at our events, on the Web and with webinars (for the latest listing see www.nyreport.com/events, which is updated frequently).

What do you think?

Comments

[Gene Marks]

As a right of center business owner I agree with you Rob. But I think the government has done one thing right - providing liquidity to the banking system. But now the best thing that the government can do is to lower, lower, lower taxes. Unfortunately it seems like another spending spree is in the works, which is not the right direction.

[Anita Campbell]

This small business owner is pretty unhappy with the current state of affairs -- and I agree with your sense of disgust over the negative emphasis in the media and the greed and incompetence all around that led us to this point.

However, I also have to look at it realistically. Economies are ecosystems. Small businesses depend on large corporations and entire industries.

Take the auto industry. One part of me wants to say "sink or swim." However, I look at around at all the tool and die shops and small manufacturers and parts suppliers and associated business services that depend on the auto industry within a 300 mile corridor from Detroit through Cleveland to Pittsburgh ... and I just can't. Many of them are small businesses. If GM goes down, so do they.

It's easy to say let 'em fail, but hard to do when it's your friends and neighbors who may be visiting the food bank. :)

Now for the good news: there's a lot more positive out there than the mainstream media would lead you to think. Few want to publicly talk about good news out of fear of seeming insensitive, but some small businesses are booming right now. Things are not nearly as bad as some would have us believe.

Whatever we do, let's not let ourselves get co-opted into a loser mindset. We small biz owners are better than that.

[Karen Kerrigan]

Thank you Rob for mentioning SBE Council as a group for entrepreneurs to become a part of if they want their voice heard in Washington. The voice and views of business owners have never been more important than now -- and we will need the help and engagement of small business owners in 2009 as the new Administration and Congress consider a range of tax, regulatory, spending, trade and other proposals that will surely impact the health of the small business sector, and our general economy.

Indeed, it is a mixed bag out there regarding the state of small business. I agree with Anita, there are many success stories regarding small business, and entrepreneurs finding opportunities during this period. At the same time, things are tough for many. Each day, I hear from several members who are feeling the brunt of these challenging times -- particularly business owners in hard hit states, or sectors of the economy. For some, this is the first time they have had to lay off employees...some long-time members are telling me that the game plan is to merely "survive" --

That being said, the voice and power of small business owners is incredibly strong, and we will be heard on Capitol Hill and in the new Administration. I wish all of you a joyous and healthy 2009! With resources like Rob's magazine and Anita's trend reports, how can we not succeed?

[Barbara Weltman]

Rob, you're so right about small business prospects for 2009. While I have heard from a number of owners across the country who are struggling and may even have to close down, there are many, many others who have had a solid year, haven't laid off any employees, and are making big plans for the coming year. These optimistic entrepreneurs don't get the press they deserve and, in effect, aren't contributing as they could to improvement in consumer confidence (a key ingredient to turning the economy around).

[Gayle Kesten]

I applaud you for speaking out, Rob. 100% appropriate -- and true. Thinking years from now, I wonder if the lessons of this mess will stick with the ones who truly need to learn them. Post-bailout, execs on Wall St. continue to fly their private jets. Um, hello?

[Matthew Weiss, President of the Entrepreneurs' Organization, New York Chapter]

I couldn't agree any more fervently. The whole situation stinks. Notwithstanding the legislative delays and so-called safeguards in passing the bailout legislation, the banks received billions of dollars without any rules or pre-requisites. They don't even have to disclose how they use the bailout money. Can you imagine asking for a loan from one of these institutions without telling them what you wanted were going to use the money for (let alone be required by contract to use it for a designated purpose)? Ridiculous.

[Steven Wesler]

Dear Robert,
I know you must have heard this a thousands times, but you are right on. You have taken a very complex scenerio and put it in simple, small business words. Why will companies that have the greatest burden for borrowing, employment, tax generation, etc. be the low man on the totem pole? Maybe the cliche' "bigger is better" is true. At least when it comes to staying in business.