I'm glad I'm not a business owner right now. You're facing a dwindling customer base with less money to spend, rising expenses and now, people in Washington who have never run a private business in their lives pressuring you to make really bad decisions--all in the name of "saving the economy."
Americans are falling into two groups: Those with no money to spend because they un- or under-employed and didn't put enough away while working to make it through a downturn--and those who have money, but are choosing to sit on it because it looks like things will be getting much more expensive for them in the future--or they fear falling into the other category. No matter how low you go with your prices, it's hard to convince people to part with their cash if what you are selling is not a necessity.
Adding to the struggle is the increase in energy costs as utilities are hog-tied and forced to abandon the cheapest forms of electricity in favor of more expensive renewable sources--and continued de-valuation of the US Dollar increases the price of oil and gasoline. And not only are you paying for your increase in energy costs--but you are also picking up the increase in your suppliers and manufacturers power and gas bills as well.
And now, the President is trying to tempt you into expanding your workforce by offering short-lived tax breaks. It's funny how Mr. Obama touts the temporary reduction in payroll taxes--but conveniently forgets to mention the increased rates that would take effect after the 2012 election. And the only way to get the highly-touted tax credits is to hire someone who has been unemployed for more than a year. Yes, some of those long-term unemployed are in situations where the specialized job they are qualified to do just isn't available in the "New, New, New Economy"--but more are people who lack the basic education and work skills to keep a job. That makes a business owner have to decide if the guy who misses a day of work every week because he is "sick again" is worth the cost of a tax-break.
i know most business owners in our area didn't study Keynsian Economics while attending Harvard--so they aren't qualified to know how things work--but those I do know don't hire or increase production in hopes that more people will start pouring through the doors. Usually in the real economy, you wait for demand to increase beyond the point where you can meet it economically--then you bring in more staff and ramp up production. If no one is buying snowthrowers, you don't keep making snowthrowers thinking that if they see enough sitting around for sale Joe Homeowner is going to suddenly want a new one.
And let's not forget about the "ObamaCare Penalties" waiting around the corner. For companies that do provide private health insurance, premiums will skyrocket at providers are required to take on high-risk, more-expensive employees that they could exclude in the past--while small firms not offering health insurance can look forward to the $2000 penalty. Every new employee added now is another two-grand to Uncle Sam down the road.
Of course, those business owners who pass on the short-sighted incentives and make fiscally-sound decisions face villainization as "not being willing to help the economy recover." Just look at the treatment banks are getting for not lending enough money after the TARP bailouts. "Greedy" and "Unpatriotic" are the terms being thrown around to describe them. Nevermind the fact pointed out by a friend of mine at a local credit union--that those coming in looking to borrow money right now are terrible credit risks--and giving money to them just puts us on the path to the same situation we were in before. Meanwhile, those of us who can actually afford to borrow money aren't doing it--because we realize that doing so in this economy is brining unnecessary risk into our lives.
So that is the decision Mr and Mrs Small Business Owner faces now: Take a giant leap of faith that things are suddenly going to turn around because Uncle Sam is going to spend even more money--and risk losing everything you worked hard to build....or exercise sound business judgement and hang on until people are ready to spend again and ride the wave back to success. Glad I don't have to face that decision.