Dark clouds hang over U.S. small businesses: survey

[phantom power]

"Too many houses were built, too many strip malls opened, too many restaurants started, too many new retail outlets were launched in the 2003-07 period and all of them cannot be supported by a consumer that now chooses to save," the group said.

...

Last week, President Barack Obama announced new assistance to small businesses, including a lending program through the Small Business Administration.

But the NFIB said the new aid is misdirected, as "only 5 percent of small business owners cite 'financing' as their top business problem but 31 percent cite 'poor sales.'"

"Loans are not in short supply," it said, "but reasons to get loans certainly are."

http://www.reuters.com/article/idUSTRE6141SR20100209

[CoffeeCat]

1. Exactly...

There's been so much attention paid to the banks and how they need to unfreeze the credit
markets so businesses can take out loans.

Whaaa?

Small businesses are struggling to get people in the door. Just as this article says, the
problem isn't getting loans--it's sales.

Nearly everyone I know is paying off/cutting up credit cards and saving their pennies like
squirrels gathering nuts for the winter. We all see the writing on the wall. We see our
neighbors, friends and relatives laid off. We wonder if we are next. So we don't go
out to eat as much or blow money at Pier One.

It's not rocket science. The general masses knew this months, if not years, ago. Why does it
take our politicians and the mass media so long to report the truth?

[phantom power]

2. I think it may be a genuine blind spot, caused by 30 years of GOP meme warfare.

Supply-side economics. Pro-big-business economics.

I think our fearless leaders have an actual blind spot for thinking in terms of demand side policy. And the Banksters that they surround themselves with aren't going to advise them any differently.

[CoffeeCat]

3. They view us like Pavlov viewed his dogs...

...just ring the bell and we'll salivate.

I think they're so used to us spending, spending, spending--and using their credit cards
while dragging ourselves into debt--that they forgot we have minds of our own.

As you said, they're so focused on the supply side, and how they can affect us. We allowed
ourselves to be manipulated for so many years.

Now we're not playing--and the whole thing is collapsing. If seventy percent of the U.S economy
is consumer spending--we are in deep trouble. People are not spending wildly with credit cards or
buying vacations and furniture with their home equity. Saving is now en vogue.

I think that's why the MSM pulls this "Green shoots" and "things are improving" meme. The supply
side figures that if we hear that enough (even if it's nonsense) that we will be cajoled back
into wild spending. If we believe things are great, we'll spend.

Well, that's not working either.

[Warpy]

4. I have a friend who started a business on a shoestring

and turned it into a thriving retail outlet. The local SBA was hopelessly corrupt, headed by a GOP crony who gave the total amount to a relative in the construction business who kept his employment numbers barely legal by calling everybody "contractors," year after year. Banks would never lend to her because she was a woman. Finally, she started using VISA and that worked for her and the business is solid and the cards paid off. While financing was a problem, she worked around it.

Her business is a stable one and she told me a couple of weeks ago there has been only a 5% drop, mostly in luxury products. She has noticed what I have, though, empty spots in every strip mall in town. What we're seeing with this economy even when we're not personally hurting is a decrease in choice, a decrease in opportunity, a decrease in places to spend the money we still have.

Small business just can't survive a 25% loss in revenue. Until and unless something is done to shore up employment in this country and make sure it pays living wages, we can expect this trend of more businesses going under every single week.

I took a banker on a tour last week and pointed out what was happening and why and suggested he take a similar tour in his own city. I sincerely hope the word starts getting out: no business can survive without customers and there will be no customers if there are no jobs with decent wages.