Very Cautiously Optimistic?

It’s Thanksgiving, and Poor Richard is thankful for a day off. It’s been over a month since I’ve written here. And it’s been a busy span of time. Poor Richard is very thankful for that and for the good customers who have provided work for all of us at the printshop behind the red awnings on Poplar Street (name withheld to protect the very delicate sensibilities of the franchise).

Crossed FingersMy fingers would be crossed if I had time to cross them.  I’m thankful that our business has been able to survive through this so far, and if business doesn’t tank again in the first months of 2010, we’ll probably pull through OK. OK doesn’t mean unscathed, though. We’re operating with fewer employees that we had when the company first opened in 1998. There is little time to work on the business for working in the business. Because our bank essentially bailed out on us early in the year, there is no money for investment in new technology or new talent. Assuming that the recovery has begun, it’s still going to take a long while to make up the lost ground of the last 18 months.

Last week, Mr. Obama’s administration stealthily held a small business forum to discuss “small business financing issues.”  The forum was announced to the public on November 16, two days prior to the date of the session and received resounding condemnation from at least one group (American Small Business League) representing small business who were neither notified of the event nor invited to attend.  Hosted by Treasury Secretary Geithner, the forum did not generate much excitement or much in the way of reporting after the fact.

That’s because nothing happened. Poor Richard managed to find the agenda for the meeting on the Treasury Department web site.  There’s nothing new there. The efforts of the SBA to open up credit for small business have been lacking and the banks have not been cooperative.  A change in the tax code to allow a 5 year carryback of losses may inject some cash into small businesses next year; but for those who have already failed it is too little, too late. At least 7 small business owners (bios listed on the Treasury site) were invited to the forum and the transcript of Secretary Geithner’s remarks contained several weighty statements, like the following:

“We need banks to be working with us, not against recovery.”

Little was reported in the press or on the internet from the day-long forum. According to a New York Times blog, most of the discussion centered on the needs of banks and their reluctance to get involved with small business.  They also stated that the Treasury Secretary and the SBA Administrator took careful notes. A report from Small Business Trends concluded that, “many lenders contend that small-business loans are too time-consuming and too small to be worth their while.” Hmmm . . .

The small business sector has long been our country’s engine for job growth and for innovation. Guess what? Small businesses are where large businesses come from. Hewlett-Packard started in a Palo Alto, CA garage. Ford Motor Company was launched in a converted wagon shop with a $31,000 investment.  In typical years, small businesses create over 50% of the new jobs in our economy.  In years like the last one, we try to preserve jobs for the folks who depend on us. The economic engine has choked down.

Nonetheless, small business owners are a fairly optimistic group. We have to be. None of us  are really looking for a bailout. Nor do we place a lot of trust in the machinations of government. Our businesses are made or broken by the decisions we make and with the risk we assume.  We have to be optimistic, tenacious, and now cautious. Many of us will come out of this with a healthy distrust and dislike of the banks who were anxious to provide funding for growth in good times but not so willing to help us survive when times got tough.  We will be less inclined to assume debt to finance growth and we will be careful about how debt is assumed.  Many of us will need to repay debt generated during the recession before we expand again.  It may take some time for small businesses to re-start the engines that produce growth and new jobs.

I suppose that I shouldn’t find the administration’s dispassion toward the small business sector particularly surprising. It makes as much sense as taking over GM with the stated goal of restructuring the  company to produce economical and fuel efficient vehicles and then promptly shuttering the Saturn division (which made economical and fuel efficient vehicles). But perhaps the worst really is over and we’ll make it on our own.

Maybe I should find time to cross my fingers.

About these ads

Comments are closed.

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: