If You Own a Small Business, What Songs Are You Singing?

 

To paraphrase a song sung by a Tony Award-winning star of stage and film musicals, Ethel Merman: “There’s no business like small business.” But it appears many small businesses have been singing the blues for years.

Data from Equifax indicates small-business bankruptcy filings are skyrocketing – they were up 81 percent at the halfway point of 2009 compared to June of 2008. It is estimated there are 25 million small businesses in America.

The most small-business bankruptcy filings were in regions of southern and northern California – the Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas.

Yes, it is true that the bankruptcy trend does not tell the whole story.

Some small businesses have been successful in getting outsourcing opportunities to sell to big firms. In looking for market share, many large companies are catering to small businesses with lower prices for goods and services.

And even though the stock market has been performing more like a raging bull since March, and a study shows small business confidence is hopeful for a turnaround by 2010, not every small-business owner is likely to be enthused.

A recent confidence survey by Administaff, www.administaff.com, showed 40 percent of responding businesses said they have been performing worse than they anticipated while 60 percent were content with their 2009 performance.

But small businesses appear to have reason to be concerned.

Published reports indicate the President Obama healthcare surtax would decrease the federal income tax base according to the nonpartisan, nonprofit Tax Foundation, www.taxfoundation.org. The organization is also quoted as predicting that 1.3 million small businesses would pay even more taxes under his plan.

Actually, healthcare reform and taxes have been issues for small business for as long as I can remember. That’s based on my experience as a business-coaching columnist, management consultant and two-year host of a radio program, which was sponsored and podcast statewide by the Association of Washington Business, www.awb.org.

Unfortunately, the concerns of small businesses in Washington state have long mirrored those throughout nation, for example, according to two different studies released in 2007.

Before the recession, economic confidence had declined among small business owners, according to Discover Small Business Watch. Some 32 percent believed business conditions in their industries were deteriorating while 40 percent complained of cash-flow problems.

The numbers were similar from the National Small Business Association, www.nsba.biz, as 43 percent of responding members said the economy was worse for them in 2007 than it was five years before in 2002.

Other financial concerns: Thirty-nine percent cited health benefits; 31 percent worried about available capital; 27 percent complained about state and local taxes; 25 percent feared federal taxes; and 23 percent mentioned a lack of qualified workers.

In 1995, 67 percent of surveyed companies offered health benefits, but now only 41 percent do so.

What issues did they want addressed in the presidential campaign between Senator John McCain and the eventual winner, President Obama? Thirty-one percent cited taxes while 30 percent said health care costs were the most important.

Overall, while 60 percent of surveyed companies invest in a Web site, a high percentage of small businesses didn’t have a Web presence. They included 57 percent of service companies; 39 percent of retailers; 33 percent of professional services; 67 percent of construction companies; and 32 percent of manufacturers.

Meantime, it appears a common denominator in small-business issues is government and whether it will continue to hinder business with economic policies. Note the concerns about taxes, and health care reform. Small businesses aren’t likely to become really confident until government stops hindering our free-market system and starts allowing economic and political liberties.

From the Coach’s Corner, you can influence your company’s future by focusing on people.

My research shows 53 percent of a customer’s buying motivation depends on people. What are the so-called soft skills of your spokespersons, customer service, finance and salespeople? Customers want value, good service and to be treated well.

And if you don’t have an effective Internet presence, get busy. And good luck!