I was in Washington last week and met with two Congressmen who sit on the House Committee for Small Business. When I asked them each what they’re hearing most when they speak to small businesses around the country I received the same answer from both.
“Small businesses are uncertain about so many things today,” said Rep. Mark Hanna (R-NY). “They’re uncertain about taxes, government regulation, our national debt, healthcare reform. I hear this all the time.”
He’s right. I hear it too from my clients, readers, and from the people at events where I speak. The economy isn’t growing and the media report that it’s because many business people are uncertain. This sentiment isn’t exclusive to small business. Big businesses, like Nissan and FedEx are using “uncertainty” to explain their own financial challenges. “Uncertainty” has defined the economy and is the big issue in this election year.
I can relate. I’m uncertain about my business too. Like so many others, I use uncertainty as an excuse for why my business hasn’t been growing. I blame our “uncertain” economy and nod my head in agreement when my colleagues and clients curse the world around them.
But wait just a second. Since when have things ever been certain? Since when do people know for sure what’s going to happen in the future? At what point did smart, independent, risk-taking small business people suddenly start blaming all of their problems on uncertainty? Isn’t uncertainty a historical part of running any business? A big part?
Of course things are never certain. There’s never been an easy time to run a small business. Is this a surprise? Maybe the reason I hear so much about “uncertainty” is related to the people I’m hearing it from. Losing your job as a result of the recent recession can make anyone feel uncertain. Like so many of those who find themselves running a small business for the first time to generate income, they’re finding that it’s a cold, hard world out here. Here’s certainty: having a job with health benefits and a retirement plan plus a nice boss, a yummy choice of organic coffees in the break room and “casual Fridays.” Here’s uncertainty: getting up at six in the morning, enduring abuse from the few customers you’re managed to scrape together, banging your head trying to find that mysterious subcontractor who promised to deliver by today, begging for money owed you from work done three months ago, tossing and turning all night wondering if that big project will finish on time and if it doesn’t where are you going to get the money to pay the suppliers you owe. Running a small business can be scary, risky, stressful and most of all uncertain. I think there are many new entrepreneurs finding this out right now and they’re the ones who are yelling the loudest.
I don’t hear the word “uncertainty” from true blue entrepreneurs. These are the ones who are getting financing, creating new technologies, making a killing on Wall Street, and snapping up competitors who lose their mojo. Are these people uncertain? Of course they are. But they love it! Because that’s their thrill. That’s how they make money. Business, all business, is a bet. A gamble. They are true business people they understand the concept of risk and reward. The more uncertainty, the more reward for the right bet.
I don’t hear the word “uncertainty” from the typical small business owner, the 20 million of us who are running tech firms, baking pizzas, changing oil, mowing lawns, buying high, selling low. I hear words like “slow”, “terrible”, “frustrating” and a host of other choice words.
There are plenty of reports of how corporations are sitting on a mountain of cash but unwilling to spend because of uncertain times. Actually, business investment has been up over the past few years. I talk to many business executives and uncertainty really has nothing to do with why they’re not spending more. These guys are not spending this money because there’s nothing to spend it on. The economy is not growing and neither are their customers. They’re seeking out profits by cutting costs and keeping employee numbers low. There’s no need to stock up on inventory when demand is slow. They don’t have to build new buildings when they have less employees. They don’t need more equipment when they’re able to produce all they need with the equipment they have. This is not uncertainty. It’s choice. These guys are quite happy to take the risk. They get that nothing’s certain. They understand that any investment they make may not pay off.
Will higher taxes bring on another recession? Will planned cuts in government spending do the same? Will our national debt bankrupt us? Will healthcare reform, in all or in part, have an impact on our economy? Will the Fed’s money policies fuel inflation and higher interest rates? Will our dollar regain or lose strength? Will Rielle Hunter and John Edwards ever get back together again?
These are big questions. But they are not new questions. These are the same issues that businesses have been facing since Caesar. It’s just that today there are no gladiator fights. Successful entrepreneurs understand this and thrive. The rest of us just complain.