Who is “Small Business Owners?”





Pardon me, but there is no “small business owners” group. We, the people who run the so-called “small” businesses, are a bunch of wildly diverse people with very little in common. We don’t vote as a block, we don’t do things as a block, and we don’t think as a block. As a matter of fact, I’ll bet we’re more diverse than most of the artificial groups that pollsters glue together.

In recent news:

San Francisco May 27, 2008 Small business owner optimism continues on a five-quarter decline, according to the recent Wells Fargo/Gallup Small Business Index (Index) survey conducted in April. The Index score dropped to 48, the lowest level reported since the surveys inception in August 2003, when the score was 69. The most recent results represent a 35-point drop from the previous survey in January 2008, and a 66-point drop from the Index’s highest score of 114 in December 2006.

This is interesting news, but hardly surprising. And, getting to the point of this post, I’d bet you could poll any group — home owners, adults, butchers, bakers, left-handed gardeners, renters, automobile owners, college students, retired people — and get roughly the same outcome.

I enjoy the use of language too. Did you notice in this press release that it isn’t pessimism increasing, but rather optimism declining?

For about six months now I’ve been trying to post on a small business angle to the 2008 presidential race, but I just don’t see how small business owners come together as a group on anything. Who is the small business candidate, now that the race is down to two main candidates: Barack Obama or John McCain? I don’t think their politics or your business ownership dictates that. I think small business owners vote like anybody else, according to their very distinct and heterogeneous views of the world.

For example, most of the pundits seem to assume that small business owners are against taxes and spending, against any law regulating the relationship with employees, and against any increase in minimum wages. Do you think that’s true? I don’t. I think the politics of any specific small business owner depends a lot more on her politics than on her business.

I’m a small business owner, and my optimism or pessimism, and my politics, aren’t a function of my business; it’s about who I am, and what I think, and how I vote. And I don’t vote for my business; I vote for myself. From what I’ve seen in more than 30 years as a business owner, other owners do the same thing.

I think we are not a group. We don’t have group opinions, or group politics. We are a lot of individuals. What do you think?

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Tim Berry, Entrepreneur and Founder of Palo Alto Software, bplans.com and Borland International About the Author: Tim Berry is president and founder of Palo Alto Software, founder of bplans.com, and co-founder of Borland International. He is also the author of books and software on business planning including Business Plan Pro and Hurdle: the Book on Business Planning; and a Stanford MBA. His main blogs are Planning, Startups, Stories and Up and Running.

15 Comments ▼

Tim Berry Tim Berry is Founder and Chairman of Palo Alto Software, Founder of Bplans, Co-Founder of Borland International, Stanford MBA, and co-founder of Have Presence. He is the author of several books and thousands of articles on business planning, small business, social media and startup business.

15 Reactions
  1. B Smith @ Wealth and Wisdom

    Tim-You raise an interesting question. As a small business owner you see things from a different perspective than an employee. It isn’t right or wrong it just is. You now have concerns like payroll and rising expenses. Marketing and sales suddenly become a major portion of your life.

    I think that we probably have traits in common that drive some common political views. That doesn’t mean we vote in blocks, just that we start to have similar positions.

  2. I have to agree that small business owners don’t seem to operate as a group or “block” – but more like individuals. B. Smith makes a good point, too, and that is that small business owners may have certain positions or stances that begin to form as a result of similiar needs, industries, etc. But even in that case, I still think that many small business owners are thinking more along the lines of “me” as oppossed to “we” when it comes to certain things. And I don’t think that’s a bad thing. It’s just representative of the fact that many small business owners ARE individuals – not groups, blocks, etc.

  3. In the same vein, I always laugh when I hear “results of the poll were mixed.” I always say out loud to myself “Largely because we asked more than one person.”

  4. Chris brings up a good point about how small business owners think with a “me” mentality as oppossed to a “we” mentality. Even just a few years ago, when corporate activity peaking, it seemed like almost all aspects of life, from voting to shopping, had a “we” mentality. Everyone wanted to be labled as one thing, or another (republican, democrat, liberal, conservitive, ect.) and would shape their ideals around this label so that they could be a better representitive of it.

    Now a days, it seems as though people in general are thinking with a “me” mentality. People are once again realizing that we are not all in fact the same, and even more so, differenciate on much more of a complex level than previously thought, and I for one think it’s a good thing.

    Take small business owners for instance. If you were to attempt to catagorize small business owners even a few years ago, it would have been a much easier and less thought provoking task, but with the “green business” movement and other grass roots businesses taking the forefront of commerce, the traditional model of a businessman with profits on the top of the agenda is drastically changing.

    Like Sam Cooke once said, “It’s been a long time comin’, but a change gonna’ come,” and those who do their best to embrace, and facilitate this change are going to be the most successful.

  5. Tim,

    You are right. It starts with the individual. Thanks for speaking up!

    Have you heard about The Clemson Institute for the Study of Capitalism in SC?
    http://business.clemson.edu/bbtcenter/cci/

    If you haven’t read The Fountainhead by Ayn Rand yet, I recommend you to get the book for your summer reading.

    Best Premises,

    Martin Lindeskog – American in Spirit.
    Gothenburg, Sweden.

  6. B Smith,

    “I think that we probably have traits in common that drive some common political views. That doesn’t mean we vote in blocks, just that we start to have similar positions.”

    I agree with this! As a business owner, you have to be thinking about things like regulatory burden and tax bite because they have an impact on your ability to stay in business and grow. Without businesses, there will be no tax revenues.

    But I also get what Tim’s saying.

    For instance, I have come to realize that business owners tend to identify with the social and political environment around them.

    Business owners that I speak with on the coasts tend to be much more OK with things like taxes than business owners in places like small-town Ohio.

    Business owners on the U.S. southern border states are more senstive to immigration issues than business owners in places like small-town Ohio, which are not affected by immigration nearly as much.

    Tim, I guess that goes to prove the point: it’s not easy to lump everyone together in one homogenous group, is it?

  7. Getting a group of people to agree on anything is almost impossible. As for running a business, everyone has their personal preference and opinions. I think age definitely has something to do with it. Younger more inexperienced business owners are less likely to agree with choices & opinions made by more mature & experienced owners.

  8. I believe many small business owners think with a “me” type of attitude because of the island that they live on. Considering that 99% of small businesses don’t reach revenues of 1 million dollars, this suggests a huge failure rate. While all businesses can fail for a variety of reasons, unfortunately, what small business owners don’t know, they don’t know. Small business owners need to reach out and get help. I would highly suggest John Assarof and Murray Smith’s new book “The Answer.” The insights are amazing – they talk about how important it is to define and understand the pyschographics and demographics of your ideal client. They also mention how too many failed business ventures focussed too much on the “trivial many” and not the “important few.” I think we’ve all been guilty of this at some point. The link is below:

    http://www.readtheanswer.com/index.php?rta=blog

    Thoughts anybody?

  9. Even though I think you’re right that small biz owners don’t think of themselves as, or vote as, a group, this seems to be an example of the pundits, campaigns, etc. putting a label where there might not be one because:

    1. There are something like 26 million small businesses in the U.S. Even if you take just the owners, that’s a large part of the voting block. (A little over 4x that number voted in the 2004 presidential election).
    2. Perhaps more importantly, pundits, campaigns, etc. see the same study data the rest of us see: SMBs drive our economy. In fact, the smallest of the small appear to lubricate its gears even while medium and large companies perform poorly and shed jobs (see http://tinyurl.com/6zo9vs).

    I think mainly for these two reasons, we’ll continue to see SMB owners called out as a group, including having positions thrust upon them.

  10. Wow, thanks for lots of great follow-up on this post, makes for good reading, great addition to the original. Thanks all. One thing that makes me (although only slightly so) uncomfortable is the idea that I should be doing a “we” thing as a small business owner, rather than a “me” thing.

    Why? Because my “we” consciousness doesn’t fall on business issues. I’ll vote for what some would call social programs, or environmental concerns, and even higher taxes, whether or not the specifics seem to favor small business ownership. For example, I’ve voted repeatedly against the leanings of the local chamber of commerce (of which my company is a member) because I thought the so-called small business block was short-sighted and selfish. Specifics? I’m against the dreaded tax revolt that’s killing our schools. I wish Oregon, where I live, would institute a sales tax to help the schools, which are really hurting. And I vote that way every time it comes up (we are still one of 5 states that don’t have sales tax). I don’t think that makes me selfish for not joining the “small business” voting block. On the contrary, I think the world would be better off if we all, as small business owners, voted our social and political and economic consciences, not our narrowly-focused business interest.

    But then — chuckling — as Anita suggests, I’ve been a left-coast person all my life, I still am, and I can’t help it.

  11. Hi Tim,
    Great post here. I’m going to forward it to a few folks.

    I read an interesting post by Sam Thacker over at AllBusiness.com on what the candidates claim on their websites regarding helping us small biz owners.
    Full disclosure: I’m an advisor/blogger at Allbusiness, but the blog i’m referencing here is not mine.

    But i thought it was a good summary, without commenting on the politicians too heavily. And helping SMB folks sort out some of the basics.
    TJ

  12. From my point of view there is no any group of small bussiness owners. But they all have one common goal to get profits, to suceed and the like. And of course they vote not as a group because the group iteself doesn’t exist.

  13. Hey Tim, wasn’t meaning to imply anything about you or your political leanings!!! Only to say that we are all products of many interests and concerns in our environments. Being a small business owner doesn’t make me forget everything else in my environment. 🙂

    And about that sales tax, I wish we had a sales tax that went to schools, instead of property taxes. Taxing those who consume, rather than those who save and own property, is not a bad way to go. Unfortunately, my state keeps trying to soak the homeowners at every turn to the point that voters are in outright revolt when it comes to school levies based on property taxes alone. Everyone knows the system for funding schools is out of whack, but the legislators do nothing and individual levy votes keep failing. A better system for funding schools might even be a tax I’d vote for!

    Anita

  14. Lots of people would like to be able to reach small business owners. Sounds easy when you say it quickly, but it is much more difficult than it seems. People would also like to be able to communicate with them in a way that really shows that their unique problems are understood. There are probably key inflection points in the life cycle of a business when owners’ challenges are more similar than different. But until owners reach those points, your experience would seem to personify the typical situation.

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