Economy – Not Recovered After All?

I keep a close eye on news about the economy, especially as it pertains to small business, and I’m often surprised at the upbeat commentaries about how peachy things seem to be. Granted, there are salons that are doing well, expanding, experiencing record growth, etc. However, based on the real-life discussions on TanToday.com, there are also many others that are concerned about the ongoing declines they’re seeing – and whether things will ever fully turn around.

Jeffrey R. Cornwall, Ph.D., is the Jack C. Massey Chair in Entrepreneurship and Director of the Center for Entrepreneurship at Belmont University in Nashville. In a recent blog, he echoed my sentiments, in that even small-business owners are becoming more skeptical about reports of vast improvements in the economy. In fact, many have come to believe things will get worse before they get better – predicting another significant economic drop, thanks to the recession. Surveys of smaller companies by the National Federation of Independent Business revealed that these owners are cautious (at best) regarding economic recovery.

One indicator of a healthy economy is when small businesses begin bringing on new full-time staff members. In turn, those staffers begin spending their wages as they overcome fears of being let go for economic reasons. This doesn’t seem to be happening on a wide scale across the nation.

Another metric of business health is a business owner’s pursuit of capital investments. Based on the surveys, less than 5 percent of business owners consider this to be a favorable time to enlarge their operations.

Cornwall finds these opinions to be prudent, and recommends the following:

• Be prepared for the regular operating expenses of your business; these are foreseeable.

• Don’t open yourself up to new debt.

• Accumulate as much extra accessible cash as possible.

• Stay cautious when it comes to new expenditures.

By strengthening (and being realistic about) your own economic status now, you’ll be in a better position to thrive when the country finally turns the corner financially.

–Karen

Related Articles:

Economy Causes Employees to Disengage

Economy Creating More Combination Tanning Businesses

Source:

The Christian Science Monitor: Small businesses aren't buying into the recovery. Why that's a good thing.