In that speech the President said it was the obligation of businesses to step up and “get in the game”. Obama is a fine speaker and his rhetoric was strong, but it seems to me his administration still doesn’t get what is really plaguing American business today.

As one commenter on Obama’s speech said in regard to his stand on business, “It’s like he took a bird, bound its wings, plucked its feather and told it to fly.”

What they don’t understand is that to create jobs, the government needs to find a way to stimulate the job makers, which are small businesses.

So what can be done to change the landscape for small businesses?

Start by putting revenues back in the pockets of small business owners. Forcing businesses to pay for health care or unemployment insurance for their workers is just another expense that many small businesses simply can’t afford.

Incentivize small businesses to hire. Hey they gave a grant to first time home buyers, why not have a hiring grant for small businesses?

If small businesses can get back on their feet and start hiring, the economy will be invigorated and show real growth but until that time we are stuck with a federal government that simply doesn’t get it and an economy that is struggling to recover.

What would you do to stimulate small business growth? Tell me what you think…

Jodie Shaw

“What’s in the Senate Small-Business Jobs Bill for You …”

This is a pretty critical time for small business on a lot of levels … so it’s more important than ever to be aware of how the “rules of the game” can and will be changing for you moving forward.

While you can’t control what the policy makers do, you can control what you do in your own business.

That means:

• Having a marketing system that actually generates cost-effective leads and brings customers to your door
• Knowing your numbers inside and out, from your breakeven points to profit margins on all of your products and services … and even seemingly “small” transaction fees, that over time can whittle away at your cashflow and profits (see my previous post on this here … “Swipe Fees”)
• Finding ways to cut costs and expenses, but more importantly learning new and effective ways to growing your top line revenues and bottom-line profits (because the only way to survive is to grow … and you can’t “cut” your way to success)
• Hiring a Business Coach to help guide you through these processes … and to keep you and hold you accountable to getting your goals and objectives

So … take a look at what the policy makers may or may not have in store for you …

More importantly, make sure you get the skills, learning and knowledge you need to successfully run your business … then it won’t matter so much what other people do.

That way, you’ll have more control over your own future … because you’ll be relying less on others, and more on the things YOU can do.

Jodie Shaw

What I find interesting is so little value is placed on the innovative nature of small business to lead any recovery and to create jobs.

So while Washington and its policy makers struggle to figure out the true costs of all of its new found forays into the marketplace … the existing and would-be entrepreneur is struggling to figure out the costs to their own bottom-line, knowing the costs of any new policy will take some time to be absorbed.

Capital and capital formation loves certainty.

The uncertainty alone of a new pricing scheme from health care to the value of the dollar as a benchmark currency is enough to keep those would-be entrepreneurs who on the margin off the field of play …

For real recovery to take place, those are the players we need in the game.

While it’s too soon to tell if new capital is truly on strike, I hear sobering stories from those owners who by all rights have “made it.”

They are successful, they run companies with $50 million to $200 million in revenues, and they are all looking for their way out.

The exit strategy for many of them is planned before 2012 and the end of this decade’s marginal tax cuts.

One owner in Las Vegas says his decision to retire early and sail the world is strengthened every day by the bad policy decisions issuing forth out of Washington.

His shop, which does tens of millions in revenues a year, employs 18 people – 18 jobs that will be shuttered when his business voluntarily closes its doors next year.

While more coverage is generated in the media weeklies by the “ripple effect” of jobs lost than the “ripple effect” of jobs created or gained, the prevailing political class unfortunately sees “business” as an endless resource of revenues that exist only to fund endless claims and entitlements.

That’s too bad.

For the past three decades, American small business has given this country the proverbial “golden egg” of technology, innovation, job creation and best practices, leading the world in ideas, new products and results.

It’s a shame that the biggest beneficiary of small business growth in the past fifty years (and an entity that collected record-breaking tax revenues during the past decade) is actively (however mistakenly) looking to cut-off and seemingly kill-off this vital national resource.

Jodie Shaw

Reich’s Wall Street Journal Op/Ed …

It’s interesting to hear how a current economist and policy leader can be so myopic in his view and opinions on how to get the “jobs machine” going in the U.S.

I don’t know about you, but I’ve read the text and I find absolutely no mention in Mr. Reich’s column about the role of small business in a job-led recovery … or the ability of small business to create new and higher paying jobs.

Here’s another way to look at some of the numbers Mr. Reich has discussed …

While he points to “big business” showing profit at the expense of lower sales, he never mentions that
according to the most recent Small Business Association figures, “small business” actually accounts for for 99.7% of all businesses in the country.

This is a phenomenal figure, and translates into more than 27.2 million individual companies.

What would happen if each of these companies hired just one person this year?

Or, even if some of these companies are simply companies “on paper” or tax shelters … what if 10 million “legitimate” small businesses hired two new people this year?

I only make that distinction because some of Washington’s policy “experts” like to claim a majority of these “companies” are actually one-person firms with little revenue and no employees, the majority of today’s biggest businesses where once one-person operations with little revenue and no employees, operating (of all places) out of a dorm room.

Much like Michael Dell did years ago … right?

Anyway … REGARDLESS of the make-up of these companies … let’s consider a more conservative count of 10 million “legitimate” small businesses for a moment …

Just say 10% of THESE companies hired just two people over the next year. That means in one year, a single company has expanded its size by 200%, and added a total of 2 million jobs to the economy – a nice growth rate of more than 200,000 jobs per month.

Not quite up to Mr. Reich’s numbers … but pretty close … and we are making some pretty conservative estimates.

The other numbers Mr. Reich fails to mention are those involved in the business cycle.

Most U.S. recessions in the post-World War II era last an average of 10 months, followed by growth cycles that last an average of 50 months.

Coming out of those downturns, small business has always led the way – with entrepreneurs and innovators bucking convention to strike out on their own.

But this time, a series of obstacles, barriers and outright disincentives to ownership have clouded the future time-horizon for would-be entrepreneurs, making the risk of taking a risk more risky than ever before.

The new reality of “business” paying health care premiums takes on a new meaning when 99.7% of all businesses are small.

Talk of taking away tax credits and incentives to “businesses” means something different to a marketplace with a 99.7% saturation rate.

Policies that punish passing on the assets of “business” or the actual “business” to heirs has new consequences when it affects a percentage of the 99.7% of all of your tax-paying customers.

The flip side of risk is return, and many of the current owners I talk to and would-be owners see greater returns in other parts of the world than they do in the U.S.

In my native Australia, for example, the continuing (yet slower paced) growth in the Asia Pacific region has owners gearing up for the next growth phase; while in South America, the emerging, resource-based economies are still producing growth rates that are projected to significantly outpace the U.S. and Europe over the next decade.

Yet, while those countries with onerous restrictions have found ways to prosper in spite of the barrier and disincentives to success, the U.S. policy makers are bent on finding ways to make the country even more uncompetitive and returns to capital even less appealing.

Credit, for one thing, is still a major issue for the small business owner, who has had to resort to an underground and black-market style barter system with vendors, suppliers and even some customers to keep operations going.

But unlike the old western movies, the political class is not sending in help in the form of liquidity, marginal tax cuts, or credits for investment or innovation.

Instead, it is looking to impose higher tax rates, more regulation, more fees and more restrictions.

In Australia, this is called “cutting down the poppies,” meaning in order to equalize the size of all the poppies in the field, you take the tall ones down.

While that sounds great in theory, it’s one of the reasons our company moved headquarters to the U.S. in late 2004, thinking it was the best move we could have made.

Now, five years later, the surrounding business environment is starting to feel a little too much like home.

More on this tomorrow …

Jodie Shaw