As we attempt to make business plans for upcoming months and even into next year, we find ourselves more confused than ever about the rebounding economy. Reports come out one day that boost the markets and give new hope, and the next day it’s the opposite. How do we, as systems integrators, know what information is relevant to us? Does a report of record earnings at Apple mean anything at all to you?
In a recent Kiplinger Report, the editors support the notion that large, primarily manufacturing companies that export goods worldwide are recovering nicely. National media often report the statistics from these organizations. The same companies sit on stockpiles of cash reserves earned from dramatic staff reductions and spending cutbacks over the last three years; plus, they have available credit not offered to small business owners. World markets favor these larger companies with global operations.
Of concern to the report’s editors is that most small businesses operate on a more local basis without the growth potential of the larger companies. Small businesses that depend on consumer spending are hardest hit. That trickles right back to our members who depend on retail, hospitality, house of worship and other vertical markets dependent upon public confidence.
A recent survey of small businesses conducted by NFIB still indicates that more than 70% of owners believe now is a lousy time to expand. Only 19% said they would hire before next year. The majority of small businesses, including our members, haven’t seen true indications that the recession is over at all. Many whom I speak with simply want to see clear evidence that business will pick up before re-investing in any growth strategies.
For small business owners, this recession is different. Compounding the problem is the looming debt ceiling and how interest rates may be affected. A resolve that maintains the current debt ceiling could end up costing public works projects. Interest rates would increase for small business loans. Increasing the debt ceiling would be less painful for now, yet extend the problem for future generations. This complex issue is yet another factor that is adding a paralyzing effect in the recovery process.
So, what can we do? Well, we can live within our means for one thing. I’ve seen some major expense cutbacks, wage freezes, tightened purchasing and so forth. More than anything, I encourage our members to work smarter, provide exceptional service and chase only profitable jobs as efficiently as possible. CW