As the numbers roll in -- jobs lost, financial markets fall, bailouts -- I'm sitting in the middle of a 40-person company I started in 1988 and wondering, as I assume so many others are, how bad this is for other small businesses.
I've been through recessions before. I was looking for my first job in 1971, buying our first house in 1982, and moving a company in 1992. In 2001 I laid off five people (of 33) in a single day.
That one was really hard. Our sales dropped steeply when the tech stocks fell, and we waited too long, got into real trouble, before we finally bit the bullet and cut the staff. What I discovered then was 1.) the 28 people who didn't get laid off were relieved to see we were dealing with the problem; they thought our response was long overdue; and 2.) hard as it is to lay off several people at once, it's not as hard as laying off an individual. An individual feels personal failure, but when it's a group, it's the company, or the economy, that caused it.
Now in this recession, which is certainly the worst in my lifetime, there's so much we don't know. I've read a lot of the available information of course, but it's pretty hard to gauge. For example, I've been watching as the official stats showed half a million jobs lost last month. And I followed as ADP showed small businesses increased jobs in September, but lost them in October and again in November. At the same time the SBA released a report showing that small businesses generate 80% of the new jobs.
But things are not that simple. Scott Shane asked Can Entrepreneurs Fix the Job Loss Problem on Small Business Trends earlier this week, and his answer is "the scale of the economic downturn is so large that we can't offset it just by boosting our level of entrepreneurial activity."
And then there are surveys like this one, which supposedly shows that 43% of small businesses aren't feeling the recession, and 4% say they're better off. Which is why I'm suggesting the survey we're going do to here.
One of the most important realities of small business in this country is how diverse and disconnected we really are. Small business owners don't vote alike, don't think alike, and don't respond to business crisis alike either. Four out of five small businesses are personal businesses with no employees. They're freelance writers, business consultants, graphic artists, designers, real estate brokers, butchers, bakers ... well, you get the idea.
While economists and politicians give "small business" credit for creating jobs, and there are several well meaning public agencies and business groups, we're still mostly out here in the trenches minding our own businesses, worrying, and wondering how bad things are and how bad they'll get. And when they'll turn around.
So I'd like to ask any and all small business owners, and yes definitely including those 21 million personal businesses, how are you doing? How bad is (or isn't) it?
With that in mind, please join me in collecting some real information, one person at a time, on what's going on throughout the economy with all those businesses that aren't big enough to attract news media attention, but are still there and, presumably, hurting as much as Wall Street and Detroit.
And to make this work, we want to start with the basics: Do you own the business? Do you have employees? How many people did you have six months ago, and how many today? What do you see happening to sales -- in percent growth or percent decline -- next year?
And from there, the stories. Add your own story. How are you weathering it, how bad is it, when will it turn around, what do you need, what have you done, what surprised you, what are you hoping, and what are you fearing?
And we'll be tracking responses and general results, so you can check back here to see what we come up with!
Follow Tim Berry on Twitter: www.twitter.com/Timberry
http://www.Gtdagenda.com
You can use it to manage and prioritize your Goals (for business but also in other areas of your life), Projects and Tasks. It has a Checklists section, for the routines and repetitive activities that any business has to do. Also, it features a Schedules section and a Calendar, for scheduling you time and activities.
Some features from GTD are also present, like Contexts and Next Actions.
And it's available on the mobile phone too, so you can access it from anywhere.
I'm (still) in the home improvement business. I bought a lot of canned goods when there was work just in case of this. I run my business responsibly and expect others to do the same but I'm suffering, as most because of the reckless mistakes that have been made.
I put the last of my cash into advertising, which greatly expands my market but the phone hardly rings. It's all moot now anyway as the cable (internet) is getting cut off tomorrow and most of my leads come in e-mail.
Later, HuffPost bloggers, it's been a gas.
Without the “sub-prime drop-ins,” I counted on my core affluent, fiscally prudent customers feeling secure. However, the recession now has them suffering job losses and decimated investment portfolios. In Oregon, unemployment has reached 8.1 percent.
Consumers not spending and banks not lending puts me in a bind – i.e., not enough revenue to cover expenses and no access to working capital to get by in the meantime. My vendors/suppliers, most of whom are small businesses themselves, suffer as I scale back orders and defer equipment upgrades.
With both ends playing against the middle, I'm closing early, conserving energy, and keeping inventory levels as low as possible to save costs. To add insult to injury, a snowstorm hit the area on Sunday, shutting us down for two days. More snow is forecasted later this week, and without the banks to extend my credit lines to help me literally "weather the storm," I'm scrambling.
Texastrixie, to reconcile your feelings, remember this: So much is at stake – my investment in my business, community, employees, and financial future. Communities live and die by restaurants, repair shops, and the vast array of other small businesses so critical to their success. We’re in it together.
:-)
Because we have outsourced our manufacturing base, we are left with only MAC-products, and services for income. A MAC-product is the overly expensive version of what we now get from China - the fancy white shirt vs. the $5 Wal-Mart white shirt. Now as the economy faulters, we all will be rediscovering the $5 white shirt (which would have been $10 if we still made it in this country).
I am torn in my feelings about small business people. The 80% of "smal business owners" - freelance writers, business consultants, graphic artists, designers, real estate brokers, butchers, bakers - makes we want to scream at them, "How could expect to make a living doing this?" But the problem is, we lead them to believe this was a good business model, and they bought it. Unfortunately, most people are no longer buying them.
By butchers I mean people who run gourmet butcher shops who may have cultivated a client base that only expects the best - the most expensive. While the butcher can scale back on his offerings to have more inexpensive cuts of meat, he is going to be known as gourmet and expensive. Just when he may need regular people who buy hamburger they will not know to go to him, or expect him to have reduced his prices. So he too may fail.
"Nothing concentrates one's mind so much as the realization that one is going to be hanged in the morning!" Samuel Johnson
Sammy was right.
There's a lot of interest in collaborative business models suddenly which is much more of a European and Japanese way of doing business. Google "keiretsu" and "industry aggregation". These models help to reduce operating costs and increase revenues. I'm seeing entrepreneurial lone wolves suddenly singing the praises of team work with other owners and not just their employees.
We're looking ourselves. Change is coming whether we want to admit it or not.
It's scary out there.
And, if I may, I'm tired of hearing how business creates jobs. That is simply Chamber-of-Commerce baloney. CUSTOMERS create jobs. The reason no one is selling porcupine sandwiches is because there is no CUSTOMER DEMAND for them. Let them become the new "health food" of the left coast, and someone will offer them for sale BECAUSE THERE IS CUSTOMER DEMAND FOR THEM.
Different agencies releasing statistics have different definitions, just as you suggest. I've seen some research that defines companies with fewer than 500 employees small businesses, but to me, a company with hundreds of employees feels pretty big. And this wide range of definitions is part of the reason we get so many different and conflicting results.
I think this is one problem that just plain comes with the territory. And it makes the research and survey data sketchy.
On the other hand, whether it's 5, 50, or 100 employees, or no employees at all -- which is the case for 20 million one-person business -- there is still a whole lot of businesses out there, and a whole lot of people worried about their businesses.
When I posted this I wasn't out to have some definitive answer about the state of small business. I just wanted to ask the right questions.
You will have some small businesses that will continue to do ok despite the economy as there will often be a base of continuing customers. Still, I suspect that if the auto plants shut down for extended periods of time, or are shut down permenantly to reduce capacity, or financial services companies 'right size' then small businesses in those towns will suffer the worst.
can ask for a third term LOL.
Being in upstate NY, we know a lot of people who are really going through a hard time. Builders, contractors, carpenters, like us are all hurting. There's nobody offering a bailout. There are no government agencies coming to me and saying "Here's a little something to help you keep your business and your employees." Not for us. We put everything into it and we lost it all.
No, there's nothing for the small businesses in the small towns...
The trouble with the reporters isn't really their fault, it's a matter of what makes what news, which is generally large companies that have bigger numbers and larger layoffs, by definition. Meanwhile small business is so completely diverse, they don't know who's who and who to ask.
We'll see what this survey turns up. I'm very curious for the results.