Monday, July 19, 2010

Small Biz, Small Beer

Our Great Recession should prompt us to shelve one of our great fantasies — that U.S. small businesses are still the driver and salvation of our economy.

I confess that in my long-ago days at Inc. Magazine, I would write and say how wonderful our readers were. I would also let the sources run off about how their companies and their industries were unique, in problems, opportunities and most of all in contributions to the nation. That was all delusion, fluff and fnord.

On one hand today though, MSM, bloggers and some government sorts have started saying the obvious aloud. That is American businesses have not carried their load and have not done their part in healing our economy. They haven't hired, expanded or even tried to return to previous employment levels.

The most obvious signs of this are the multi-billions and even trillions of cash big companies keep warm in their nests. Despite frighteningly low interest rates of return, big companies are worse than banks at risking anything. They are absurd arguments that would support Scientology's engram hypothesis. They've been burned and are damned if they'll risk anything, even if it puts more money in more hands to buy more stuff to grow the country.

Let's be plain about small businesses though, whether you use the 15, 50 or 500 employee benchmark. With a few exceptions, they have not stepped up. They are not showing the Inc. or even the John Wayne ideals. They are not showing guts, risk taking, concern for fellow Americans or any of that.

We hear much whining about banks not lending money for small-biz use. Instead what appears to have happened is that banks understandably are more demanding of applications than when they were fools lending a decade ago.

As a result, small business sorts may have to present a more detailed and grounded business plan for a loan and even shop around for banks that are sick of their money sitting stagnate. If that's too much to ask of business owners, perhaps they need to give their companies to their kids or employees who might show some gumption.

There's some fascinating reports on what small businesses are not doing as from:
The current status remains. Businesses, including our allegedly heroic small ones, have not done their parts. They want more customers, more orders, more cash flowing to them. They are not risking, not hiring, and not acting to their billing.

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1 comment:

Uncle said...

Ditto. According to some recent numbers I've seen, maybe there's a reason for being chicken. The average US business lasts 12 years. Logically enough, a third of Western plus Japan businesses also last less than four years. Sort of suggests they need more than platitudes to survive: like brains, balls, business plans, and customers.

Tell me again why capitalism is so wonderful?

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