Small Business Owners, Only YOU Can Save the Economy

Default-Image-20

Who appointed small business owners as the savior of the U.S. economy?

Harken back to that old commercial with Smokey the Bear “only you can prevent forest fires.” Steve Rubel of Micropersuasion picked up on a similar theme about a year ago when he satirically wrote that “Advertisers, Only You can Save Web 2.0” pointing out the folly of assuming that advertising revenue could support all the Web 2.0 startups.

A similar thought here:  Small businesses, while critically important to a business ecosystem, and drivers of new job growth, are not going to be the one and only savior of the economy. Don’t get me wrong — I think small businesses are crucial to our economy. Small businesses create lots of new jobs. Small businesses also create work not traditionally thought of as jobs, such as independent contracting relationships — their impact is even larger than official numbers suggest.

But small businesses did not create the economic situation we find ourselves in. It was created by greed and excess and speculation — mostly on the part of very big businesses.

Yet groups invoke the “do it for the small businesses” mantra to support measures that really are intended for special interests. For instance, trade groups are asking for “buy American” protectionist provisions to “protect small business interests.” Even Lou Dobbs (who I’ve come to admire for his tough stance on some issues) is beating a dead horse on the protectionism for small businesses theme. Another example: venture capitalists are lobbying to support their investments and the interests of the tiny handful of companies that get venture funding.

The problem is, we can’t “help” every industry and every interest. And efforts to help one industry can have unintended consequences. As this Kelly Spors piece in the Wall Street Journal Independent Street blog points out, protectionism could hurt more small businesses than it helps.

None of these special interests represents every small business. The more help given to special interests, the harder the rest of the small businesses have to work in order to shoulder the taxpayer burden and ripple effects that result.

Some small businesses are critical of the stimulus package, preferring provisions that cut across large swaths of small businesses, such as tax cuts, instead of specific industries, as this New York Times piece points out.

We’re all interconnected. Any time you help one group, it’s done on the backs of everyone else, who must pay for it and live with the consequences. As Andy Birol, one of our Small Biz Experts here once wrote, in the words of Paul Simon, “one man’s ceiling is another man’s floor.”

18 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

18 Reactions

  1. Nice post. I like the words by Paul, one man’s ceiling is another man’s floor.

  2. Hi Anita,

    What does that stimulus package do to a country’s economy? I often read about it but couldn’t still grasp the whole idea about it. I also have learned through a newspaper that PH(my country) also have this stimulus plan. This is why I really wanted to know what will this do? Will this help the country’s economy or will it worsen the situation?

  3. Martin Lindeskog

    I am appalled to read about the different special interest groups that are lobbying to get special favors and handouts. I am glad to see that NYT is daring to have an article against Obama’s stimulus package. I bet some talking heads will compare the feeling of the stimulus package with a certain “accident” that could occur if you don’t visit the bathroom in time…

    It was good to read the piece by Kelly Spors and see that America has not turned into a protectionist place with a wall around the country yet. Harry Binswanger’s has good arguments for free trade in his article, ‘Buy American’ is UN-American. http://boothie.notlong.com

    You are right that we are “interconnected” in a way due to the globalization, but we shouldn’t assume that we should be our brother’s keeper. Instead, we should strive to become real traders, exchanging value for value.

    I don’t agree with your statement that “greed and excess and speculation” are something negative. I will soon interview the author of the book, Greed Is Good: The Capitalist Pig Guide to Investing, Jonathan Hoenig, on my podcast show. We will then discuss the misconceptions of the concept of greed.

    I think that Aristotle’s view of the “golden mean” is valid if you see it as a healthy balance between two opposite directions, creating a harmony. But the question is what’s excess? According to which standard? Says who?

    Then it comes to speculation, is is natural stage of a financial market. You will have speculators, investors and traders. They have all important roles on the market. The difference is their time perspective.

    Take George Soros as an example. I have my opinion regarding Soros personal motives and political agenda, but he played an crucial role to the currency situation some years ago. He gave several people at the Feds (state banks) a wake-up call regarding the different currencies. I didn’t like to pay 500% in interest rate on my check credit for some days, but it was a lesson for the Swedish officials that the SEK (krona) was “over valued” according to the mechanism of supply and demand.

    I go on and on, but I will stop for now! ;)

  4. A agree. The Obama administation is should focus on helping small businesses.

  5. Interesting info. I’m afraid that any solution will leave certain people and/or businesses behind. Is there any way for everyone to benefit?

  6. Tim Berry

    I couldn’t agree more. I feel like I’ve been trying to say (write) sort of the same thing, but you’ve put it extremely well. Right on!

  7. Your article points out that this is a complex issue. But, I’m also thinking that maybe it’s more simple than we make it out to be. I wonder if it’s complex because Washington and their special interests are playing an old game – I’ll scratch your back and you scratch mine. What we ALL need to do is recognize that we’re in a new game now. And everyone needs to start behaving responsibly. It’s not just about government spending or tax cuts. It’s about taking a new, fresh look at what’s going on and making small responsible improvements along the way.

  8. Martin Lindeskog

    Ivana:

    It will go in the direction if business people will act according to acronym DIY (Do It Yourself) as you have in your URL name (DIYmarketers). Don’t wait for the handout, special stimulus package, etc., start get busy… But at the same, “we the living” (to paraphrase the novel by Ayn Rand) have to get some “slack” from the establishment and let us put seed in the ground, let it grow, and then have the right to harvest and use the fruits of all our labor!

    I will send you an email regarding on how you could have a fresh look on what’s going on. I am positive that good things will happen in the near future and in the long run… :)

  9. The sense I have of global stimulus packages and growing protectionist trends is that it’s all for the benefit of big business (many of which are responsible in large part for the mess we’re in). The small business owner will be shut out because these solutions are being designed as if ‘one size (large) fits all’; when the reality is that there are a wide range of solutions required for the wide range of businesses.

  10. We are hearing similar themes in Aust. Whilst we do not have the volume of special interest groups, the connection between the what the government is proposing in their handouts eg construction and the benefit to small businesses is a stretch at best.

  11. Martin Lindeskog

    Susan: Same situation here in Sweden! :(

  12. For years small businesses have been invisible. Yet, 70 million people either own or work for a small business. Its time that small business is invited to the table. But, we have to be on message, and small business has yet to come up with a coherent one. I blogged about this not too long ago. Small business owners needs to get involved, join green and trade groups and push for greater advocacy. Until small businesses demand attention—which they could get given their collective power—it’ll never come out way.

    http://ecopreneurist.com/2009/01/21/what-can-you-do-to-green-the-country/

  13. A $300 billion economic stimulus for small business could translate into 8 million jobs!
    There are roughly 2 million manufacturing, wholesale, and retail business establishments in the United States, if every business became their own $150k stimulus, the economy as whole would be stimulated by $300 billion! At an average of $18.50 per hour, this amounts to 8 million jobs in the countries backbone – small businesses. This is John Krech and I own ePhiphony Incorporated. We specialize in helping small and mid market businesses improve their bottom line and free up cash. Who isn’t interested in doing things better, reaching bigger goals, making more money, and providing better service? Our product, Phitch OC 9.0, is the only software of its kind. While there are many solutions that manage and track inventory, only Phitch OC 9.0 optimizes inventory from a financial performance perspective. The end result is that many businesses can stimulate their business by $150,000 or more by improving their capability to order the right amount of inventory at the right time. There is nothing to lose and everything to gain – we offer a free trial and a 30 day return and if your mention this call to action by entering VAR number USGO in your online order form, you will receive a 20% rebate (www.phitch.com).

  14. As a small business owner that helps other small businesses through understanding marketing, I believe this economic recovery will certainly be driven by small business. But in order for this to happen, we have to focus on jobs creation (to grease the wheels) and credit extension (to help us grow).

  15. I could not agree more. Thank you for that wonderful post.

  16. As i mentioned in my most recent blog post- Obama states “It will be the small businesses that save this economy” and he is so right! The web 2.0 phenomenon is so powerful that business professionals have not even began to see the tip of the iceberg and grasp the power of social media/ social networking for business purposes. that is what specilize in discussing here http://www.socialnetworkingsandiego.com/blog/

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>




Is your business credit worthy?