What may be ahead for small businesses
The small business sector has come through the first quarter of 2019 in, for the most part, reasonably good condition. But conversations with observers who follow the sector and readings of various surveys indicate clouds on the horizon.
Maybe. Cynics might say that asking half a dozen economists about the economic outlook will bring at least a dozen answers. The truth is that economic projections are notoriously difficult.
It makes some sense, then, to start our look ahead with results of a MetLife-U. S. Chamber of Commerce first quarter survey of business owner expectations. The data indicate declining optimism about the economy - except in the Midwest, where "overall business health has improved," according to survey respondents.
But the increase, the survey summary continues, "comes solely from businesses who report their health as 'somewhat good' rather than 'very good.' This quarter, fewer Midwest small businesses anticipate revenues increasing compared to the last quarter."
The Midwest is where we hang out, however, so maybe the year's results will be at least sort of good. Still, the uncertainty indicates some forward planning may be wise.
Sean Hutchinson is one of those observers who believe owners should get ready for tougher days. It's time, Hutchinson says, "to do some strategic thinking. We're on the cusp of a downturn."
Among the steps Hutchinson suggests: "Go talk to your banker about how you can keep your business bankable. Credit tightened all of a sudden" during the last recession, Hutchinson recalls, which makes "getting out in front" important.
"A loss of liquidity hits smaller businesses especially hard," he continues.
Hutchinson is one of three founding partners of SVA Value Accelerators LLC, a nationwide consultancy with primary offices in Denver, where Hutchinson is based; Chicago and Miami. You can check out the people, and the company's approach, at www.buildvaluetoday.com. (Barry Goodman is SVA's Chicago partner, but I talked with Hutchinson because Goodman was out of the country.)
Warrenville attorney Bill Price, a creative and knowledgeable small business specialist who hung out his GrowthLaw.com shingle in 1984, is another observer who suggests planning should be done. It might, Price adds, be time to make some changes.
"Changing your (business) plan isn't the same as giving up," Price emphasizes.
Downturns can be especially difficult on startups, Price says. "Business startups are always risky, especially those that haven't done their homework," Price says. "Most last four or five years - or until they run out of money."
There are bright spots, though. Price notes data that indicate "Women (entrepreneurs) collectively employ more workers than the Fortune 500," and that racial and ethnic minorities increasingly are taking the small business plunge.
"People continue to start businesses," he says. "The market is broader, often including international support." You can find Price and his firm at HTTPS://growthlaw.com.
© 2019 Kendall Communications Inc. Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Learn about Jim's skills at www.kendallcom.com.