Staying ahead of the inflation threat
Posted on November 19, 2009 at 12:29 pmJeff Cornwall says entrepreneurs shouldn’t be afraid to implement frequent small price increases. Playing it safe now and trying to catch up later won’t work.
There is never a smooth and orderly increase in prices for every business in the economy and small businesses often suffer the most. If you have big suppliers and/or customers they can tie your hands. Your costs go up, but you are unable to pass along these costs with higher prices. One of the added costs we now have to worry about is increased taxes. This is a real cost to entrepreneurs and cannot be ignored as a part of inflationary costs.
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Red tape worries
Posted on November 12, 2009 at 11:18 am
Jeff Cornwall relays a study about small business owners’ top worries which shows that — despite the crummy economy, the credit crunch and all the other fallout from the housing bust — dealing with government regulations is by easily entrepreneurs’ biggest headache. And to think government spending has risen by 76 percent this decade…
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A lack of regulation? Phooey
Posted on November 11, 2009 at 10:10 amJeff Cornwall passes along a link to the latest Regulators’ Budget Report, which looks into the rise in spending on government regulation, a trend that started during the Bush administration and shows little sign of slowing — or of promoting entrepreneurship and job creation.
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Small biz expectations rising, but precious little else is
Posted on November 10, 2009 at 10:00 amThe latest NFIB small-business optimism survey shows a glimmer of optimism about where the economy is headed, but not much in the way of rising sales or better access to credit.
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But that’s ’cause most of them pinch the penny so tight…
Posted on at 8:12 amThe latest Fed survey of banking conditions won’t do much to put credit-strapped small businesses at ease.
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Yeah, this won’t help
Posted on November 2, 2009 at 7:55 am
The somewhat expected bankruptcy filing of CIT Group looks set to further reduce credit options for small business.
CIT’s factoring business, worth about $42 billion in 2008, is estimated to be at least five times the size of its closest competitor, Wells Fargo & Co, followed by other smaller companies such as GMAC Inc and Rosenthal & Rosenthal. It is not clear if these rivals have enough capacity to take on all of CIT’s existing customers.
SEE ALSO: The company’s official restructuring site.
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TARP opens its doors to small banks
Posted on October 22, 2009 at 7:11 amBut small banks aren’t rushing to line up for President Obama’s proposed expansion of the SBA’s main lending program. And in moves reminiscent of the ongoing health reform debate, other proposals already are making the rounds.
“There are different ways to skin this cat,” said the Senator, who suggested the creation of a $50 billion loan pool that would combine TARP funds, Federal Reserve loans and bank contributions that lenders could use to service small businesses. That idea has gained the support of about 30 other senators.
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BB&T, Regions, SunTrust top satisfaction list
Posted on October 21, 2009 at 8:03 am
J.D. Power has asked the question and crunched the numbers to figure out how satisfied small businesses are with their banks. For Middle Tennessee’s largest banks, the numbers vary quite a bit: BB&T, which ranks 13th by deposit market share, leads the list and Regions and SunTrust also score well above the industry average. Off the pace are Bank of America, Fifth Third and U.S. Bank.
The equivalent survey from a year ago has Regions a lot further down the list. Overall satisfaction has fallen more than 3 percent as the credit crunch and recession have taken their toll and bankers and small biz owners alike.
Local investors look to fill bank credit gap with $100M fund
Posted on October 13, 2009 at 3:14 pm
Nashville-based Claritas Capital has begun raising up to $100 million for a mezzanine fund that would commit between $3 million and $15 million to health care and business services companies left without capital-raising options. A team led by Morgan Keegan alum Bruton Harvey will lend based on enterprise value and charge double-digit interest rates.
Claritas is aiming at health care-services and business-services companies with $2 million to $10 million in earnings before interest, taxes, depreciation and amortization. Banks have fled that market since the meltdown, and Claritas is betting they won’t return for two to three years.
SEE ALSO: Banks are hurting small biz’s growth potential
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Banks are hurting small biz’s growth potential
Posted on October 12, 2009 at 9:38 am
Two related bits of info and analysis on the scope and repercussions of banks’ continued tightening of credit. The latest Fed numbers show outstanding commercial and industrial loans have dropped by some $250 billion in the past year. That has been most painful for small businesses, which can’t hit up the bond market to raise capital and create the jobs they have traditionally created coming out of a recession. Or in econospeak:
It’s not clear whether small businesses will continue to play their traditional role in hiring staff and helping to fuel an employment recovery. However, if [...] financial constraints are a major contributor to the disproportionately large employment contractions for very small firms, then the post-recession employment boost these firms typically provide may be less robust than in previous recoveries.
SEE ALSO: Via Milt Capps, a potential solution that would vacuum up leftover TARP cash.
Small biz fears the worst on health premiums
Posted on September 30, 2009 at 7:51 am
A survey by the National Small Business Association says small companies expect to pay 13 percent more next year for their health insurance premiums. One in five thinks the hike will be 20 percent or more.
“Premium increases forced 31 percent of small businesses to hold off on hiring a new employee, and 19 percent to actually lay-off an employee. This cannot continue if we have any hope of economic growth in the near future.”
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The recovery needs small biz, but small biz needs help
Posted on September 22, 2009 at 8:01 amForbes publisher Rich Karlgaard reminds us that small companies are the backbone of a normal economic recovery. But he adds that the Obama administration must pretty much throw overboard its economic platform for that to happen this time.
We now have reached the inflection point — e.g., the recession is ending, but the recovery is embryonic — where small businesses historically jump to the lead and pull the American economy along. It is precisely now when small businesses ought to be coming out of hibernation, leasing or buying cheap commercial property, and gearing up for growth.
…
When the bi-coastal Obama administration thinks of small business, it undoubtedly dreams of promising start-ups churning out solar panels or turbine blades for windmills. Well, that’s fine, but America will never get back to 5% unemployment and defuse the commercial property bomb with windmills.
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Small biz a little more upbeat
Posted on September 8, 2009 at 9:19 amThe NFIB’s monthly small-business survey portrays the nation’s entrepreneurs as being slightly more optimistic than earlier this summer, but not yet ready to begin hiring again.
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Small biz gets no credit
Posted on July 22, 2009 at 2:08 pmThe good news: The National Small Business Association says the number of small-business owners who think the economy will grow in the next year has more than doubled since December. The bad news: The number jumped from 3 percent to 7 percent and many of the business who could use a financing boost likely can’t get one.
There was, however, an increase in the number of small-business owners who used a traditional bank loan in the last 12 months. While a positive indicator that bank loans are an option for some small businesses, this increase also reflects the fact that more businesses are turning to outside sources of financing as the difficult economy has forced them to use up business savings and earnings—making access to affordable capital all the more important.
SEE ALSO: A report from federal regulators that says almost 90 percent banks are tightening the loan underwriting standards.
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Entrepreneurship in a new age
Posted on June 9, 2009 at 8:07 amJeff Cornwall says entrepreneurs looking to make their mark need to account for the sea change in Americans’ spending attitudes.
Understand that economies are not just isolated to commercial transactions. There is a strong long-term tie between our economy and our society and culture. There are signs that we may be in a period of fundamental economic and cultural change. The frenzied consumerism-driven economy that dominated our past decades may never return.
SEE ALSO: The Small Business Threat Index developed by Cornwall and a George Washington professor.
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