What Businesses Really Want

In an interestingly titled piece in Bloomberg (“Obama Charm Offensive Must Convince Small Businesses of Economic Vitality”), author Ian Katz opens with comments on what President Obama needs to do to help convince businesses to begin hiring again. He explains how the President needs to convince companies to part with some of the cash they are “sitting on” and use it to increase the country’s employment numbers. But what is most telling about this story is that he actually spends the great majority of it talking about how one company in particular, Hope Global, has weathered the Recession and why it probably won’t be hiring American workers any time soon.

Hope Global, a Rhode Island-based manufacturer, produces such varied products as laces for Timberland boots and cargo nets for SUVs. Owner Cheryl Merchant explains that for her company to start hiring any time soon there has to be real positive movement in the economy.  “I’m not putting in people believing it’s going to happen. It’s got to happen first,” she told author Katz. What she has done is to restore some of the cuts the company had to make during the worst of the downturn.

This illustrates one of the major problems with the economy in this Recession - companies are not hiring until the economy improves, but the economy is not going to substantially improve until more people are working. It is difficult at best for consumers to purchase those products companies like Hope Global are selling when they don’t have sufficient income due to unemployment or underemployment. President Obama is big on the “Hope and Change”  that got him elected, but slogans don’t change the economy.  Ask a business owner what they think about "Hope and Change” of any sort, presidential or not, when making plans to hire people and buy new equipment and factories. They don't HOPE the economy will CHANGE. They need solid and certain data to back up their plans for growth. Business owners have to make real choices in the real world. They have no safety net since their entire net worth is tied up in the business. Mistakes can be fatal, and when the government shows up saying “We are here to help” the business owner should be cautious to a fault.

So if businesses are caught in the no jobs/no sales cycle, is there anything else that can be done to help? Simply put, the government needs to get out of the way of small businesses and let them at least try to make some headway. The two-year extension of the Bush-era tax rates was a start, but it needs to be at least 5-7 years and preferably permanent. Two years is not long enough for business owners to feel confident about taking chances; they need a long-term or permanent sense of security regarding taxes. Eliminating Obamacare and its draconian regulations would also benefit small businesses by removing multiple layers of requirements that threaten to strangle companies. Finally, cutting the layers of paperwork that governments require for any steps would free up business owners to do what they do best - create jobs and improve the economy.

Do I expect any of this to happen soon? Of course not, but the more we speak up about what needs to happen the better chance some of it might go through. Until anything changes, business owners will continue to struggle with rules, regulations, and requirements that do more to hinder economic growth than they do to improve our situation. If you are a business owner who is working to expand, first I salute your tenacity and spirit. Second I offer two complementary reports that can help you in your efforts. I am available through the links below if you have questions about funding your business plans.

Craig G. Francis is the owner of Francis Financial and The SBA Loan Store. He has been a top producer of SBA Loans since 1981, and has worked with Dun & Bradstreet and Bank of Commerce. Craig Francis has the expertise to steer clients through the often confusing rules and regulations associated with SBA Loans, having helped over 2,000 businesses acquire over a billion dollars in loans. He can be contacted through CraigGFrancis.com, SBALoanStore.com, on LinkedIn, or at 888-666-9722.