To Small-Businesses, It's Economic Data Overload

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At worst they serve to needlessly scare the hell out of people who otherwise would be buying our products.

That doesn't mean all economic statistics the media report are without value. Some are actually useful to a business owner—such as interest and inflation. It goes without saying that many of the guys in my league suffer from abdominal inflation brought on by too high an interest in the lox and bagels served after our softball games. But I'm not talking about that. I'm talking about how a change in interest rates can cause higher or lower debt-service costs and make financing easier or harder to attain. And an uptick in the Consumer Price Index or Producer Price Index can quickly translate into higher production and operating costs. These are figures smart business owners keep a wary eye on.

The price of commodities affects us directly, too. Copper and steel are part of just about everything that's produced. Their loss in value over the past year has been a big reason why inflation has been kept under wraps. But rising economic activity will put pressure on how much these materials cost, and these costs will affect our profits. The price of oil has the same impact, and not just on small businesses. An extra 10 bucks a barrel could cause my softball team's dues to skyrocket, what with the added expenditures on Icy Hot and Ben Gay.

In addition to the above data, smart business owners I know also keep their own statistics. These are numbers directly related to their businesses. For example, I'm told that the quiet guy in left field does something in the "import/export trade" and needs to pay close attention to the dollar's exchange rate with the Iranian rial. Whatever—he's one of the few good hitters we have. And our pitcher, who pitches only because his two knee surgeries make it the only position he can play, keeps a very close eye on shipping indexes because his company relies heavily on transporters to get its products to customers. That makes sense, too.

Well, the season's over. We went 3-15. We beat a group from Our Mother of Mercy Retirement home, and two middle-school girls' teams. But hey…a win's a win. The reason why is irrelevant. Almost as irrelevant as some of the economic data that's constantly thrown in our faces.

Gene Marks, CPA, is the owner of the Marks Group, which sells customer relationship, service, and financial management tools to small and midsize businesses. Marks is the author of four best-selling small business books and writes the popular "Penny Pincher's Almanac" syndicated column. He frequently speaks to business groups on penny-pinching topics. More penny-pinching advice from Marks can be found at www.quickerbetterwiser.com.

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