What is the “American Dream?” What is your personal definition for your achievement of the American Dream? Is it completing college, buying a home, paying bills easily, having a family, or a combination of these?
For many Americans it is starting their own company, owning their own business, and achieving prosperity by growing a successful business. America has always been known as an entrepreneurial culture where people can start with an idea and work hard and risk their own money to see their idea to a successful fruition.
With the 2008 financial crisis, resulting in a real estate sector meltdown and taxpayer funded bailouts of large banks and Wall Street firms, many Americans are left wondering about the virtue of capitalism. Many are increasingly angry with the Great Recession destroying the financial stability of the American middle class and poor while large corporate and political culprits seem ultimately unscathed.
Whether it is coming from the Tea Party or the Occupy Wall Street protests, many Americans are angry with corrupt politicians, lobbyist influence, politically connected favoritism, government bailouts, record foreclosures, wage stagnation, and high unemployment.
As an alarming result, we are in danger of painting all capitalist business with the wide brush of what are in reality the ills of crony capitalism. We are in danger of hating our capitalistic system in general due to those that have turned it into anything but a free market system with corporations that are reliant on government favours and politicians that are addicted to corporate money.
Privatizing ill gained profits and socializing reckless losses for corporations, and inciting class warfare as a blame distraction for politicians, has put us on the wrong path of many demonizing all capitalism and seeing all business as the villain.
This could not be further from the truth in economic reality. Small business owners are economic heroes, not villains. Small business and self-employment continues to fuel the growth of the U.S. economy. It is the private sector that creates wealth and prosperity for a nation, not the public sector or government.
The Huffington Post, not exactly a right-wing media outlet, recently ran an interesting business article titled “Small Business and the Simple maths of Job Creation.”
The article contained, “If one out of every two small businesses (50%) hired just ONE person, we would have zero unemployment.” It further noted, “If each of the 6 million small businesses that have employees hired just two people, we would only have 2 million people unemployed in the US (1.3% unemployment).”
Successful small businesses are a positive multiplier effect on communities as explained well in a recent Business News Daily article titled, “Thriving Small Businesses Boost Real Estate Values, Research Shows.”
We all see small business owners every day in our daily routines. Do we realise they are economic heroes not villains, no matter the class warfare rhetoric that now defines “millionaires and billionaires” to blame and hold responsible as those with self-made, not government-given, income starting at $200.000 per year.
What motivates small business owners to keep going even in today’s harsh business economic and political climate?
Lisa Aldisert is president of Pharos Alliance Inc., a management consulting firm specializing in strategic planning, business development, and organizational/leadership development. Pharos provides management consulting for growing organisations with a specialty in small business.
Aldisert was the founding president of a business association for entrepreneurs. She is on the faculty of New York University’s School of Continuing and Professional Studies. She is the co-author of The Small Business Money Guide: How to Get It, Use It, Keep It and the author of Valuing People: How Human Capital Can Be Your Strongest Asset.
Lisa Aldisert shares her insights:
BKH: What are the main differences between Main Street and Wall Street?
LA: “Wall Street” tends to refer to large, global, (mostly) publicly traded financial institutions with a significant presence in New York City; while “Main Street” refers to small to mid-sized (mostly) privately-held businesses anywhere in the U.S. The main differences pertain to size, political and financial influence.
BKH: Are there any major similarities?
LA: The most important similarity is that large and small companies are in business to make a profit.
BKH: What are the leading personal attributes of small business owners?
LA: It’s hard to generalize; however, most are people who tend to “live and breathe” their businesses. Many are passionate, hard-working, dedicated professionals.
Successful small business owners are persistent, decisive, creative, and forward thinking. The successful owners also have amazing attitudes that reflect optimism, perseverance, and problem-solving savvy regardless of what’s happening in the economy, the market, or their communities.
BKH: What are their significant motivators?
LA: In today’s economic environment, some are motivated by survival, while others are motivated by making a lot of money to support a lifestyle.
Others are motivated by being able to help their customers, clients, or patients through the products and services that they offer. Some are motivated by creating solutions to everyday obstacles.
BKH: What are their leading worries in today’s economic conditions?
LA: Several worries come to mind – in no particular order. First, cash flow can be challenging. Many businesses have receivables, money owed to them by their clients, which take longer to collect than in a more robust economy.
Second, availability of credit is a worry. Many journalists have written about this topic; however, it’s a bigger issue than the banks’ willingness to lend money to small businesses. Business owners often fund their companies’ cash shortfalls through credit cards, their personal savings, etc., so availability of credit spans their personal and business lives.
Third, hiring additional staff is a worry. Business owners want to have certainty that their companies will be able to generate consistently higher sales to cover the investment in new employees. Finally, the psychological uncertainty about the economy is infectious, so maintaining confidence in the face of uncertainty is a worry.
BKH: What are their standard sacrifices right now people may not realise?
LA: The main sacrifices relate to money and time. As noted, currently many small business owners need to fund cash shortfalls in their businesses through personal savings and credit. It is not unusual for them to forego their own salaries when necessary.
They sacrifice time, because many owners invest more time in their businesses when they function with leaner staffs.
BKH: What employee benefits do small business owners most desire to offer?
LA: I think this depends on the business. Most small business owners, however, want to be in a position to offer competitive benefit packages, including access to health care.
BKH: Are most small business owners millionaires and billionaires?
BKH: What is the level of community involvement you see most from small business owners?
LA: Many are involved in community activities where they offer their insights, connections, and expertise. As a result, they enhance their community standing and visibility.
Others are involved in activities that they are passionate about that have little to do with their businesses.
BKH: What are the key success elements for small business growth and hiring?
LA: Several elements are important. In spite of leaner times, it’s important to keep investing in marketing and business development. Businesses that turn off the marketing spigot, in order to save money, will pay the price later.
Business owners need to constantly be on the hunt for customers, clients, or patients. When hiring, it is important to match the appropriately qualified person for the available position.
I also believe that it is more important to hire someone with a great attitude and determination that can grow into a job, than to hire someone with all of the requisite skills who has a mediocre or lousy attitude.
BKH: What advice would most small business owners give politicians on job creation factors?
LA: Small business owners have different voices, so their advice will vary. I would advise national and local politicians to meet their small business constituents and understand their issues.
BKH: What do you wish more people realised about small business owners in general?
LA: You probably know more small business owners than you think. They are everywhere from your next-door neighbours to the people who own businesses that you walk by every day – your dry cleaner, your dentist, the coffee shop owner.
Small business owners support the communities that they live in; their children go to school with yours; they celebrate the same joys and milestones that everyone else does. And, at the end of their “every day”, the buck stops with them.
The small business owner is speaking truth to the American people and politicians, for they are America. They want their business to grow and to have the need to hire people. They want to be job creators.
Small business owners are trying to succeed despite the unfair playing field that crony capitalism plants and the legislative and taxation roadblocks politicians erect. They are not looking for taxpayer bailouts, nor do they have multi-million dollar lobbyist in Washington on their behalf. They do not have politicians in their pockets nor sit on influential economic councils in Washington.
The average American has the right to be angry with economic conditions right now and what led to the Great Recession. Yet, Americans should not blame capitalism – they should hate what has been done to true free market capitalism. Americans should note, small business owners are economic heroes, not villains. Supporting small businesses supports communities and job creation.
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