What small businesses need to thrive:

[Stinky The Clown]

"Customers"

[Captain Hilts]

1. And govt-sponsored health insurance for their employees. nt

[HughBeaumont]

2. Preferrably gainfully EMPLOYED customers.

Not "Business 101". Common SENSE 101.

[napi21]

3. That's what I've been saying for weeks! We are in a chicken

or the egg situation. Businesses wont or can't expand unless they have more demand for their products, and there will not be any big demand if people don't have any money! Giving additional loans to small businesses MIGHT help a little, ut not to expand but to borrow for P/R and inventory. I still think the only BIG thing the gov't can do is infrastructure improvements. That would put people to work & money in their pockets. Then they can buy things thus generating demand etc.........

[safeinOhio]

4. If only small businesses could get a tax break

they could hire more workers. Anyone buying that statement, come see me about a great, once in a life time deal on a almost new bridge.

[guardian]

5. Actually businesses need "profit" not "customers"

If business costs are so high that it can't make money on a customer then more customers won't help. Part of the problem businesses are having now is predicting what costs will be next year. Because of this even if they have the potential of new customers, owners are hesitant to take on any new business that will require hiring more people or buying more capital inventory/equipment.

For example, my Dad owns a small commercial laundry that provides textile rentals. Mostly linens/tablecloths/napkins to restaurants and the little entryway mats to cut down on dust/dirt. He is right on the edge of folding right now. Yes he could use more customers today. But he tells me his biggest worry is what will happen if his costs go up. Most of his customers are saying that they can't afford any price increase in his services. His 3 big concerns are

1. Energy costs. If they go up 30% - 50% - 100% due to Cap & Trade legislation this alone will crush his business. He'll have no choice to but to raise (maybe double prices) and most of his customers will drop his services rather than pay more.

2. Increased taxes. If taxes go up he can't make it without raising prices. Doesn't matter whether the tax is corporate, personal, federal, state, local, or called a "fee." It is still money out of his pocket.

3. Increased payroll or overhead expense to comply with new legislation.

If he folds, then his 9 employees are all out of jobs. He is one of the few employers in this rural area in an already depressed labor market. He pays well above minimum wage (typically $10-$12 hour for unskilled labor). People like to work for him because everyone else in town only pays $7-$8/hr for similar skills. Fortunately, he has saved and can afford to retire (he is 79). The only reason he doesn't close the doors now is that he feels an obligation to provide the employees a job. He is old and not in the best of health. Profits have already dwindled down to the point that there is almost no financial reason for him to keep things going. If things get worse what little profit he makes will turn to a loss, and he'll close the doors and liquidate the equipment.

[theoldman]

8. My hat is off to your dad for still working at 79.

I agree that profit is very important but without customers you have no chance of making a profit. If his customers say they cannot afford a price increase, where will they go? Are they going to do their own laundry?

[guardian]

9. Are they going to do their own laundry?

Yes. Restaurants will wash their own tablecloths/napkins. It won't be as good but cheaper. You can tell if a restaurant washes their own stuff. If you notice that napkins have a slightly greasy feel/smell they wash their own. Commercial laundries use steam injection in their washers to get the water temp up over 185 degrees to break down the grease so napkins are "clean and fresh". Most home washer temps never get hot enough to break down the grease leaving the filmy feel.


Yes. Stores will buy their own rugs at Costco and wash them at home. Again you get a cheaper product with less carpet pile and the home washer won't come out as clean. But it is cheaper.

There is a price point at which people stop using your product. A little liquor store may pay $20 for carpet service but they won't pay $50. They will do it themselves.

[taught_me_patience]

6. This is so true

Most people do not understand the fundamental tenet of finance:

If return on equity is lower than the cost of equity, then growth destroys wealth. Right now ROE is low because customers are not buying the same amount of stuff, so credit growth will destroy wealth.

[Laelth]

7. Hear, hear! k&r n/t

:dem:

-Laelth