The Economic Plight Of Small Business

First of all, when it comes to describing the plight of small business in America uncertainty is tops on the list.  I am also confident to say that uncertainty may also be on the top of the list of small business challenges worldwide.  Uncertainty is a very crippling thing.  It causes the small business owner to make some softer decisions.  It also helps small business owners perform less critical decisions.  Uncertainty can interfere with the notion that more risky stuff needs to occur.  As a result, calculated risks will not find their way to the strategic top of the cream of ideas.  The actual plight facing small businesses today is uncertainty.

I just spent a week traveling about chatting with small business owners.  Some I know rather well and some I have never met before.  I posed several nebulous questions before them.  The answers and chit chat they offered was kind of telling.  For the most part, all of them are a bit unsure of where their business might be three years from now.  Not one of them shared a high degree of confidence in their near future of performance opportunities.  Not one.

Just taking the time to read the Wall Street Journal recently, through and through, and the same uncertainty concern seems to hold true for corporations and the world's top companies.  Uncertainty is not just a political buzz word lately.  It is also becoming a mainstream habit, a part of our business world of reality.  Too many business owners and business leaders are pulling in their creative reins at a time when innovation is screaming out loud for more things to do.  This is not a very good scene for the world of business.  I am certain that the largeness of our looming debt on the balance sheets of countries, corporations and personal home budgets has a good deal to do with the higher levels of uncertainty being expressed.  Debt is a heavy weight.  It's benefit has already been realized.  So all that remains is its requirement to be lowered.  Nothing good remains to be enjoyed by that kind of a problem.  Debt brings on last years enjoyment at this years expense.  How certain is that?  Maybe it is not uncertainty that we fear?  Something to consider, for sure.

Uncertainty also circles around the fickle nature of the consumer markets.  Consumers have come to prove how unreliable their spending habits tend to lean.  With the complicated methods technology offers to identify how and where the consumer will release what it offers to spend has become a maize of metrics that read like a complicated, strange jigsaw puzzle.  The task of marketing new growth has become a daunting chore.  Not to mention, expensive to acquire.  This fuels the notions of uncertainty as well.

What is a small business owner to do?  How will they fight this overwhelming world of economic plight with the very limited resources they have to tap?  No wonder they are expressing higher levels of uncertainty.  Be also reminded that this is an election year.  The business owners have had to endure some of the most complicated, well-designed, high volume productions of lies and promises that they know their future political leaders will never be able to provide.  Uncertainty looms very large right now.

The economic plight of small business in America becomes sandwiched between the breads of these challenges.  As a result, innovation appears worn out.  Innovation sounds fruitless.  Innovation has found its dim light to the end of its promised tunnel of joy.  The business world is pulling in its horns for a time of breathing.  It is exhausted with this last run for survival.  Most small business owners are hanging on with sheer determination and with as much creativity as they can muster to stay alive.  That's it.  That is where the good ones seem to remain.  The not-so-good-ones are folding up shop, selling off assets or re-positioning with the help of shared ownership in order to move forward towards the next days.  The economic plight of small business today is learning how to manage its way through the current ocean of waves pounding uncertainty to the shores of their balance books.

The economic plight of small business today is uncertainty.

So what do we do about it?

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Let's Unscramble This Business Mess

Do These Guys Look Like Good Business Partners?  Neither Does Debt.

Several years ago I was struggling with my business.  I could not generate enough money to cover my expenses.  The amount of debt my business was managing was tolerable at that time.  Nearly every business model manages a certain level of debt.  Debt becomes much like a routine line item on your financials.  It seems to always show up on the income statement every month and the corresponding balance sheets.  Debt has become a routine fixture to the business world.

My business several years ago was managing its routine debts.  Some of those debts were short term, 'on account' product purchases from my suppliers while others were longer term debts coming from loans secured at my local bank.  At that time, my business was managing a debt package of about 15% of its gross sales.  To some of you who do not know what that means, this amount of debt is too large to carry.  Typically, if fifteen percent of your business income is dedicated to servicing your monthly debt payments you are carrying too much economic burden in your business model.  There are a lot of exceptions to this policy of thought, but make no mistake about when and when not to allow this kind of debt management to get out of hand.

Back when this was happening to my business I was able to manage the payments and keep the debt from climbing any larger.  The mess began to occur when I trusted that process and allowed that debt to become a permanent fixture in my business management process.  I permitted that debt to become a 'line item' of allowable cost.  It was permitted, expected, budgeted and planned.  I was doing what most Americans have learned how to do.  I was living above my business means.

This kind of economic policy will eventually create a terrible financial mess.  Sooner or later it will grow too large to be manageable.  It will become larger than the business revenues can support.  It is also a problem in that this kind of expense is not something you can cut out of the budget without paying it off.  In other words, you cannot trim down debt like you can cut back on energy use.  You cannot trim down debt like you can cut payroll expenses.  If budgets need to be cut, laying one employee off will do the trick immediately.  However, regarding debt, you cannot decide to stop paying it and cut it off.  Debt cannot be trimmed from the budget.  Debt is a permanent fixture in your package of business requirements.  Debt is a sneaky little monster boss.  Be very careful how much power you give it.

Debt also has a tendency to limit where you can cut back on other expenses.  For example, if you are working to expand your business and you have placed some major capital investments into new markets, your business demand for increased marketing money has come alive.  The demand for spending more money to market your expansion successfully has cramped where your cuts can occur when the debt exceeds your ability to keep up with the cost of its servicing.  The cost of reaching new markets is not as serious of a contender in expense attention as is the debt you carry.  Debt limits the decisions you have for cutting where you would prefer to cut.  By the pure nature of its demand for being serviced first, debt reduces the funds you have for feeding the other important business costs you need to be servicing.  Debt limits what you can spend, when you need to spend it and where you want to select what to spend.  Debt is a terrible boss.  It is a clear boss with a terrible business partner attitude.

When you manage debt, especially by plan, you admit to taking on a business partner.  That debt becomes your new boss.  It might not be much but it will govern a lot of what you prefer to do.  Debt will see to it that your future gets a few limits placed on its expense spending ideas.  Debt will grow up and begin to govern where you spend your business income.  Debt will not only boss you around, it will want its money first.  I know what I speak to be true.  If your business has any debt, that debt has become your silent boss.  It controls a portion of your business model.  If that portion is 15% or more, you have a little mess developing.  You have a boss who is beginning to dominate what you can and cannot do in your business model.  You have a small business mess.  You have an unwanted silent partner.

Let's unscramble this business mess.

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Warning: This Is Not A Politically Correct Post!

What color is your nose?

I warned you.  The title was absolutely correct.  This piece will not cover friendly ground.  You were properly forewarned.  Read on or go away if it might offend you.  It is your choice, not mine.  I am comfortable with it.  You have been warned.

Therefore, if you are of the sensitive type, looking at the world through critically adjusted sunglasses, you might quit reading this post right now.  This particular post is not aimed at being careful enough to wake up on the politically correct side of the bed.  For those who believe everything in the world needs to be more sensitive to all people and all things, you may perfectly excuse yourself from reading anymore of what is to follow.  You may want to keep your nose clean.  You may go away right now because I am going to write on.

The world of employment has gone overboard to be politically correct.  Did you know that?  It has.
I know a lot about this subject, I take a lot of notes in the workplace.  I also do not worry much about what others think of me.  I am solid with who I am and why I do what I do.  Has it cost me promotions and support along the way?  Well of course it has.  Being politically correct does not guarantee success but it will help reduce the challenges you face that destroys good opportunities.  That is a certain and 'for sure' statement.

Why write about being politically correct?  We all know it exists and we all know it actively runs true in the workplace.  Political correctness has a lot of influence regarding elements that come with a lot of the important matters regarding workplace respect.  Remaining politically correct is a prudent and clever way to help an employee keep from being overlooked for the next promotion.  Trust me on this one.  If you know how to keep your nose colored brown you will help your promotional chances.  I know that is not politically correct, but it is true.  In my book, the truth trumps a politically correct stance.  If that is too direct, excuse me.  Furthermore, I do not care if it strikes the more-sensitive spots remaining on the skin of someones true character.

We have become very soft as a society.  No tough stuff is allowed anymore.  Being direct and tough on personal matters looks like bullying, off-colored remarks, insensitive tongues and aggressive behavior.  All of these things are no longer allowed to run at all in the current workplace.  I happen to respect this approach.  I agree that being insensitive is a very wrong thing to perform.  It destroys the potential for success in such a quiet way.  I do not promote an aggressive and insensitive tongue.

However, sometimes the truth needs to stand taller than the quiet tongue that is trying so hard to remain politically correct.  This is where the conflict finds its best debate.  Should we permit some 'not-so-politically-correct' positions to enter the workplace if they reveal some unfair and protective management practices?  Is there a time when being politically correct can hurt the future integrity of the workplace environment?  I say it is true, can happen and does happen more often than we have the courage to reveal.

For the sake of keeping your job, most will remain steadfast to practicing the art of controlling their thoughts and tongue.  Most clearly recognize how dangerous it might become to permit their mind and tongue to come out and tell the truth about something being practiced wrong in the workplace that should be exposed.  The potential to become a whistle-blower brings with it some very real employment risks.  How brown is your nose?  How serious do you feel about protecting the status of your job?  These are real questions with real consequences.

Let me give you a classic example.

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Remember This...Always Keep The Faith.

Faith, Learn How To Keep It.

There is something to the idea of keeping faith.  I know a lot of people in the world, smart ones too, that will dispel the idea of keeping faith.  They just do not want to believe that something like faith can carry a huge advantage in the marketplace.  Although there are tons of great examples scattered all over the trail of business success, where faith has won its presence, they continue to dispel it.  They have that right.  They can believe what they want to believe.

I, on the other hand, have seen too many wonderful examples of the opposite.  I have seen how keeping the faith has helped to inspire many business leaders to do some things they might otherwise never attempt to do.  I have witnessed faith do its magical work, over and over.  There are not a limited supply of examples.

Faith is a very powerful deal.  Faith is also one of those things that is difficult to teach.  You cannot tell someone to keep up the faith and it automatically sticks solid in their mind and actions.  Faith is a process that requires some practice.  Faith is a process that requires support when it does not deserve support.  Faith is a process that occurs when all else makes sure it cannot occur.  Faith is amazing.  It works best when it is least likely to be proven.

There are thousands upon thousands of business leaders in this world who are managing their business models through some very tough economic times.  The past five years have been especially difficult.  The road to profits have been a real bumpy ride.  In fact, some of that ride has come to a complete stop in certain circumstances.  The pain felt when the activity stops for a short period of time is not a good pain to experience.  There is not a business leader alive who has not had this terrible feeling.  The fear of business failure is a real and devastating feeling.  Business leaders deal with it off and on in their careers.

Sometimes the pain of feeling the loss a business can produce overcomes the business leader.  They can become depressed and filled with added anxiety.  I have seen this happen to me, my associates, my business friends and many other business leaders in the business world.  Anxiety for business failure is a real thing to navigate.  It can take possession and dominate the business decision process.  It can cripple the good efforts a business leader needs to perform.  It can alter the clean thoughts, the healthy procedures and the needed clarity for a business leader to find their way through some tough times.  Anxiety and the fear of business failure can become a very devastating process.

Faith becomes the hero of the day.  Faith provides a solid way to help struggling business leaders get through some of the most difficult times they will or have ever faced.  Faith is likely the only thing that provides the necessary strength for a failing business leader to get on with getting on.  When all else fails, grab some faith and move on.  Do the next best thing and work your way out of where you are.  It will work out and your faith will help see it through.  Learn how to practice the art of faith.  Learn how to believe in doing well.  Learn how to practice reaching the improvement side.

Have faith.

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Unintended Consequences.

Think About Your Future Consequences

Want to manage a real set of challenges?  Try on a tragedy in your business model.  Try dealing with something illegal that has happened inside your employment ranks.  Better yet, try facing the press on regional television regarding an immoral act that has been exposed to the media in a widespread way.  Now you have a set of challenges landing on your desk that will consume some very valuable time.  Not to mention, damage your business in unintended ways.  Welcome to the world of unintended consequences.

Business leaders are often faced with tough selections in their business decisions.  Sometimes the selections offer a 'no-win' situation.  I have had to deal with many 'no-win' corners in my life regarding business leadership selections.  It ain't fun.

Sometimes those 'no-win' situations arrive without warning through unintended crossroads developed from poorly selected choices of earlier opportunities.  When we look back we clearly see how earlier choices lead up to this unintended consequence.  Now we are faced with some 'no-win' decisions.  Regardless of what or how we select our next choice of actions, we will lose.

I term this kind of situation in business the place where leaders learn how to minimize loss rather than maximize profits.  Profits are no longer the main driving force of the business model.  Minimizing loss has taken over the steering wheel.  The business leader is now facing choices that are designed to lose with the least amount of loss maximized.  The 'no-win' pattern of choices must be dealt with at the lowest possible cost.

Amazing enough, this kind of scenario is simple to describe and easy to define.  Every single business leader recognizes this kind of situation.  Many have dealt with these kinds of situations often in their business careers.  'No-win' scenarios are not misunderstood occurrences.  All of us have had our fair share of them.

What's more, all of us have experienced how we felt about dealing with unintended consequences.  It is a troubling experience.  Sometimes that awful feeling lingers for a long time.  Guess what?  Even though the awful feeling lingers on and the unintended consequence drives the heart into a pattern of continued troubled feelings, the show must go on.  Business leadership must still endure.  Business leaders still have a show to perform.  The acts to that show are running live and continuous, regardless of how badly we feel about dealing with unintended consequences.  The show must go on.

Page two.

Get More Serious About Becoming More Serious.

The passing of time has brought with it some interesting developments in human interaction.  For example, it is no longer 'cool' to make fun of people.  That used to be a 'cool' thing to do when we were kids.  I did not say it was a right thing to do, I just reported that it was once considered a 'cool' thing to do.  Another thing that has changed significantly is that the growing concern to become politically correct in all things has been increasing its attention now by the ticking of the clock.  We are living in times that demand everything to be politically correct, in all matters, at all times.  This is a certain truth.  In fact, if you are running for a significant political office and you failed to be politically correct twenty years ago, when it was not necessarily as important to do as it is today, it defaults immediately and carries over to today!  The error you made twenty years ago, that was acceptable then, is today's 'your fault' and will taint your character right now!  This is also true.  The passing of time has brought with it some interesting developments in human interaction.

The public, the media and consumers expect a certain degree of perfection when they travel about our interconnecting worlds.  This is true.  Our actions have become more acute with the passing of time.  We are judged more seriously than ever before.  For goodness sakes, do not make the mistake of passing gas in the wrong place at the wrong moment...it might go viral and ruin your life!  Do not laugh, it has happened to many people in significant positions of life management.  This is true.  That is how serious we have become about every little detail and every little matter.  We are tyrants about people in power who express a casual or simple human mistake.  We have become so critical of each other that we run our lives circling our fears around what we say, what we may do, or how we may believe.  We must make sure that all of our actions on these subjects meet the high public standards that have become our governing rules.  We must travel our lives in a seriously careful and politically correct fashion, if we want to climb up the popularity scale.

What the heck does this have to do with business?  Everything.  It is just as important to understand this set of rules in politics as it is in business.  A business is running its way through its life trying to earn the support of its constituents...the consumers.  The game of attention and support is much the same.  A publicly insensitive business model will be as much ignored and banished as an insensitive politician would be treated that was running for the President's office.  The voter and the consumer will place their support with someone else.  Someone who is more sensitive and more caring.  Welcome to the twenty-first century.  It is not my fault that this is true.

How does a small business leader deal with this tightened rope?  How does a small business leader protect themselves from a simple public error that could easily destroy their future consumer support?  What's more, I wonder how many small business leaders truly understand how fine that simple line can become?

I watched a small limousine company recently experience a freak and tragic accident with one of their passengers who lost a life in that event.  It happened to be a small young girl who was hurt innocently.  Regarding that unfortunate event, no equipment safety violations were ignored.  However, the young girl did climb out of her passenger seat while the vehicle was running and when a corner was turned, she fell sideways and right through an unlocked window out onto the street, which took her life.

Last month, this was a business trying to do its thing like so many other business leaders try to do.  It was marketing its wares, working its maintenance, preparing its hospitality, attracting its consumer support and making sure the checkbook was ending up balanced at the end of each day.  It was doing the same stuff every other business owner works each day trying to do.  That limousine company has several fleet pieces of equipment to manage.  It has a couple of locations to serve.  It was a growing model.  The operative word...was.  Today, the popular media movement and the evening news has gone to examine the two divorces of the owner from his past, his troubles in two other business models fifteen years ago, his run-in with the law over twenty years ago about drinking and driving and his current past due payments to one of his tax collecting agencies.  He is not being currently projected as being anything less than a criminal.  His business activity has come to a screeching halt.  It is over for his model.  This one unfortunate event has suddenly happened and taken his life work, his thirty years of business efforts and tossed it into the round file for his future use.

It is a very tight rope we all walk, people.  I am not here to condone any support for illegal, inappropriate or immoral actions of a business model or the life of a business leader.  Just read many of my perspectives of support in any one of my previous posts and you will notice I believe in operating cleanly.  However, I do recognize and want to share with all of you business leaders that your actions are at great risk in this new day and age.  You are walking on a very tight rope with very little margin for error.  Do not take this warning lightly.  The world is a much more serious place to live and play today than it was thirty years ago.  Recognize this truth and make your life adjustments accordingly.  If you are working your business model in a careless fashion, stop it.  Your days are numbered.  You may walk into your office tomorrow and discover some things surface that will never be able to be overcome.

Get serious about becoming more serious.  I heard about a furniture store owner who allowed one of their customers to borrow the company delivery van to take home a purchase they made at their store.  I just heard a few thousand of you readers cringe at that statement!  Be very careful!  The rope is so much tighter than you could ever expect.  Get more serious about becoming more serious.  Protect your tomorrow.  Ask the owner of that limousine company how he feels about one of his two divorces and you might discover a very angry man.  Remember, during the investigation of that accident, that one limousine passed inspection just two days prior to that unfortunate accident.  That truth, however, no longer matters...and he knows it now.  Protect your tomorrow by doing it today.  Get more serious about becoming more serious.

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