Thinking Entrepreneur
An owner’s dispatches from the front lines.
All right, hope had a good run. It elected a president, made people feel good for a while, and sold some expensive artwork. Three years later, the unemployment rate is still high, most homeowners are still licking their wounds from diminished values, and many companies are not back to where they were before the Great Recession.
That’s the bad news. Now, here’s the good news. For many — not those who are still unemployed, of course — things are getting better. No, I am not an economist. Nor am I running for office. And I am not intoxicated. I am, however, an entrepreneur who owns businesses that sell things that are bought with discretionary income. These businesses certainly did see a drop in sales at the end of 2008, and 2009 was not a banner year. But, yes, things have slowly been getting better. In 2011, I hired about five additional people. And I really hired them. No 1099 contract workers, no temporary workers, no part time.
If you have been tracking my blog posts, you will understand that I took these steps very slowly, very carefully, and with much apprehension. The sting of laying off people or cutting back hours is still fresh, both emotionally and financially. The last thing I want to do is find myself with too many employees again. And that is why I believe we have reason to be optimistic. I am seeing an increase in the amount of furniture people are buying, partially because houses have been selling again and people are moving again. Large real estate projects in the corporate world that have been on hold are being completed, and art is being bought for the walls. And my picture-framing business has started to see customers who come in with art they say they have been meaning to frame.
My sense is that other business owners are in a similar position. They would rather run overtime than take the chance of over-hiring. When their confidence builds that an increase in business activity is not just a blip, they hire people. It has probably already started.
Part of the reason is pent up demand. With the exception of things like restaurant meals and car washes, many purchases can be put off only so long. Eventually, they have to happen. Roofs, air conditioning units, clothes, cars and even dental care will be bought. In my business, I have been buying new equipment – trucks, computers — and taking care of maintenance that had been avoided the previous couple of years. I have talked to four car dealers who say they are very busy, as well many other business owners from roofing contractors to a large carpeting business. Almost all say things are better and that they believe pent-up demand is one reason.
Is pessimism nature or nurture? Or maybe nature or torture would be more accurate. It’s very hard to be optimistic if you watch the news — the 24/7, in-your-face, unfair-and-unbalanced news cycle. There is good money to be made in bad news. Double-dip recession? Bad policy? Socialism? Class warfare? The collapse of Europe? The fact is, we are in an election cycle and it is in the best interest of people to make things sound as bad as possible. I don’t disagree that the high unemployment rate is a huge problem, but I still see positive signs. I believe that companies are starting to give raises again. I have. For many employees, it has been four years since their last raise. That is a long time. The raises might not be what they used to be, but they are something, and inflation has been low.
There is something else that has been going on the last few years. Smart companies recognized that this was not just a recession but a new world order, and they have made some changes. From real estate moves to Internet strategies to efficiency improvements, smart companies are coming out of the last three years better positioned for growth. The companies that are just waiting for things to get better might not be so fortunate. Could something happen to cause another slowdown? Sure. But the question is, how much damage are you going to do to your business by either letting opportunity slip through your fingers or by giving a competitor a chance to grab market share?
With growth comes hiring, and with hiring comes less gloom and doom. As I said, I’m not an economist, but I believe that my forecast is at least as reliable as the predictions I’ve heard from most of the professionals. But please tell me: Is it just me? Or are you seeing cause for optimism in your businesses, too? Don’t worry, I won’t tell anybody!
Jay Goltz owns five small businesses in Chicago.
Article source: http://feeds.nytimes.com/click.phdo?i=ac87d4316f833bf0f6078d2f351352cf