Posted on 01/28/2015 9:34:29 PM PST by george76
When small and medium-sized businesses are dying faster than they’re being born, so is free enterprise,” writes Jim Clifton, Chairman and CEO of Gallup. “And when free enterprise dies, America dies with it.”
For six years, the number of small businesses closing has exceeded the number of businesses starting. The number of business deaths exceeded births in 2008 for the first time in US history and has gotten worse in the ensuing years. Since 2010, the rate of small business closures has increased.
In the 1980s, the number of new businesses exceeded those closing by more than 100,000 every year. Today, 70,000 more businesses die than are started each year. This somber fact goes a long way to explaining the current weak job market. Two-thirds of all new jobs are created by small businesses.
...
A few years ago, I had an idea for a small business. It wasn’t a flashy tech start-up or a potential billion dollar idea, but I thought it would meet a need in the marketplace. Things were preceding well until I met with lawyers. The amount of regulatory and legal clearance that was required convinced me to bury that idea deep in the ground and never speak of it again.
I doubt my experience is unique.
...
All the rhetoric out of the White House or the halls of Congress can’t arrest this American decline. Small business is literally dying in the United States. By the time the media or the political class notices, it will be far too late.
(Excerpt) Read more at breitbart.com ...
In manufacturing, the quanitity of scale is damn near one to one. I have become amazed as I’ve learned more in the past year about how incredibly efficient manaufacturing in the Auto Industry is (as a process). Our production engineers know what 1 foot of forklift traffic costs us between point A and point B.
But, you mentioned the largest obstacle to Engineering Start ups. The capital for the software, hardware and talent. Generating business in the engineering field is very challenging. You need some breaks, a lot of hard work and enough bankroll to introduce and sell your credntialed talent. The latest technology in engineering is the various 3D modeling designs. Its very cool and makes design and assembly/construction coordination much more efficient. But you have to by the licenses (thousands per year) per each individual. You also need top of the line computers and servers to run the sofware, not to mention colored plotters etc. Finally, you need E&O insurance and that’s tough to get for a start up, not to mention, very expensive depending on what you are designing. And when one client puts in an E&O claim, frivolous or not, it can break a start up in a hurry. The good side of the software licenses is that as long as you stay with the same providers, the licenses usually include upgrades year to year.
Great discussion here by the way. It’s fun to ponder ideas of grandiuer and success.
Not good. Not good at all.
I hope you get it all figured out and get it running again.
When I was young nobody ever heard of most of those businesses, if they existed at all. People used to say nobody could compete with Sears and Montgomery Ward. Then K Mart replaced Sears as the biggest retailer, and people said that about them. Where are they now?
That's very sweet of you. Thank you. I have a pretty decent paying job right now. It's a good gig with a lot of potential. So for now, I'm still in the game but am always on the lookout for an angle. ;o)
I learned something and have been teaching my kids the lesson. Be an ambitious opportunist. Your brain and wit is the most profit potential you have. But be a good Christian and American first. For instance, I once bought and sold a semi trailer because "it was in the way" for a $2,500 profit. I never touched the trailer. lol. I bought and sold a broken car in a gas station parking lot for a profit of $600 between the hours of 1:00 AM and 7:00 AM with a little help from Craigslist. I learned that you can get about $15 dollars to recycle a washing machine and a little less for a dryer. On my way to the recycle yard, and again with a little help from Craigslist, I also learned that I can get 6 machines in the back of my truck with good ratchet straps.
Demographics certainly has a role, but it’s much more complex than what you state.
I have seen many a “baby boomer” business owner retire early, because they are sick and tired of the ever increasing struggle against their own gov’t’s policies, regulation, crony capitalism, taxes (if they are successful), and distortion of the playing field that ever more seems to benefit big companies. The generation before them simply seemed able to enjoy going on until they physically (or mentally) could not. Now, who the heck can enjoy it?
Conversely, many “young ‘uns” coming up today take a good look and say, “the heck with that”. If they don’t (take a close look) they usually fail.
But more significant, IMO, is that every single successful small to medium size business owner I know, who started out before 2000, says that in the present environment, they would not have succeeded. (I know only one who started after 2000, and he’s thinking of getting out.)
Great post; thread. Are there many opportunities besides fracking [BIG] craft beer [SMALL] to _______ [VERY SMALL]?
http://money.usnews.com/money/personal-finance/mutual-funds/slideshows/15-sectors-to-watch-in-2015/1
Here’s something that’s always growing…
debt enslavement BUMP!
You do make a good point that’s always been true: In some areas of endeavor, small to medium size companies can succeed with flexibility and lack of cumbersome management, etc.
The problem is that in many areas, the advantages of being small have been overwhelmed by the disadvantages that I described above. There are still many “niches” that work, but there are fewer every year, and they are not making a big enough contribution to the total.
My own opinion is that the Dems (for the most part) want to suffocate the small to medium size business owners, because as a class, those business owners are usually fiercely independent, and (for the most part) opposed to the liberal agenda.
As for your own endeavor, I wish you all the success in the world! (Well, ok, maybe leave 50% for the rest of us!)
:-)
Change that "may" to "is" and I agree 100%. Heck, the person who has the capacity and the drive to start a business is not the same as a TYPICAL long-term 8 am to 5 pm employed person.
I work in HR... you would have to be insane to try to go into business yourself in the U.S. today with the intent of ever hiring somebody else.
“When you see that trading is done, not by consent, but by compulsion — when you see that in order to produce, you need to obtain permission from men who produce nothing — when you see money flowing to those who deal, not in goods, but in favors — when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you — when you see corruption being rewarded and honesty becoming a self-sacrifice — you may know that your society is doomed.”
It's not just government that's the problem here. I think that describes the situation in many private companies these days!
Now I'm sure I can get a small start-up up to $100M in size in no time. LOL.
You raise another interesting point about younger folks. One of the reasons for the decline in the number of businesses isn't just demographics -- it's that people who retire today are being replaced by a lot of younger people who don't have the same maturity, capacity, drive, etc. to succeed in business.
Fortunately, I work in a business where knowledge, dedication and passion can still go a long way ... and doesn't require a lot of overhead costs!
Boy oh boy...does this article ever hit home for me.
My parents were both 1st generation, born in this country. They believed in hard work, no credit, no mortgage, not wasting money on “new” things (keep things til they just wore out/fell apart).
College was NOT an option (unless I wanted to go to nursing school or become a teacher). I HAD to learn a trade in HS (hair stylist). My dream, to have my own little shop.
Well w/a large family (5 kids) I always worked and (salons/retail) and decided when my youngest went to elementary school that long days, standing on my feet for not much $ could be replaced, using my people skills, by getting a Real Estate license. I was (sort of!) finally working for myself (but w/an RE company). Well, the RE market went belly up; and (now w/kids in college) the uncertainty of commission as opposed to steady (but small) pay lead me to a retail job (managing a small store on the days the owners were not present). Worked in that small business for 12 years, and the business closed right before Christmas (Amazon is trully killing main street). So now I’m on unemployment, looking for a similar set up to what I had before. It’s too costly to activate RE license (and pay insurance fees etc); and it’s somewhat costly to revive my hairstylist license.
Due to unemployment regs, I check online almost daily; low/mid level retail jobs fill almost immediately and are ALL chain store related (minimum wage). There is a glut of experienced workers (like me) but the small businessss we worked in are closing rapidly. In the bldg my old store was located in, a 2nd business closed. Two empty stores fronts added to the dozens (big and small—a Walgreens closed last fall) of empty retail spaces.
But hey...the economy is on the mend, right?!?
You’re ignoring all the willing hypocritical contributors to the tax-free zone known as the ‘internet’. That includes many FReepers. It is NOT ‘just’ Wall St...
My brother had to shut down his small business of damaging 0bamacare requirements.
Yes, that (Facebook) is a good example. The right idea can succeed, still. On the other hand, does Facebook contribute to the wealth of the society, or is it more of a recreational activity that actually reduces the productivity of many? So many people seem almost obsessed with it. Hmmmm....
As for the young ‘uns, yes, that’s what an entitlement society tends to do... :-(
Good Bye to the once great American middle class.
It’s harder for a fascist tyranny to control millions of small businesses than it is to control just a few very large ones.
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