Small Business

This Business Owner Leads His Own Recovery


Dismayed to find his company's cash flow looking like last year's, Gene Marks continues to delay hiring and is taking on jobs he wouldn't have considered before

When I coached Little League, I always tried to say the right things. Like "Just meet the ball." Or "A walk's as good as a hit." Or "Hey, catcher, did you wear your cup?" But, like every good Little League coach, I was full of baloney. Sure, this stuff was important, particularly the cup part. Singles and getting on base are nice. But everyone loves the home-run hitter. He's the guy who brings the fans into the park. He's the guy whom the parents on the sidelines talk about when they're not complaining their own kid isn't getting enough playing time. This year my business, like many of my clients', will not be hitting many home runs. It's becoming a repeat of last year. Sure, we're playing small ball. We've got lots of little jobs all over the place. They're paying the bills. Keeping my people busy. Covering my salary. But my cash flow is like watching a Little League game when the kids first learn how to pitch: slow and agonizing. That's because, unlike the years before the recession, we don't have those dozen or so big-money projects that really bring the big bucks in. Is there really a recovery? Many of us aren't really seeing it. And I think I know why. Capital Equipment

For starters, most of my customers are still not making significant spends on capital equipment. Especially when compared with years before. Small businesses that provide products and services that fill a customer's operational needs continue to do O.K. That's why my friend who runs a tax preparation business isn't feeling a lot of pain—people still need to do their taxes. And my client who sells raw materials into the food processing industry is doing fine. People still need to eat. And my neighbor whose company provides computer hardware support is not hurting too much. That's because companies have computers and (being a technology consultant myself) I can confirm they don't work very well. Some of my company's software products are moving, but our big-ticket software products are sucking wind. I'm not alone. I have a customer whose six-figure printing equipment line is not moving. And my cousin's construction business is standing still. None of us are going out of business. And we're still making money (I'll explain how shortly). But because we sell products and services that are purchased by people who are making capital investments, we're seeing a lot less demand right now. That's because our customers, both big and small, don't seem to be making many large investments. And like facing a 12-year-old throwing his first curveball, there are just too many scary things out there. For example, the political rhetoric is scaring them. The President calling our bankers "fat cats" is not exactly a business-friendly posture. Hoards of angry Tea Partying lunatics crying socialism is a little disconcerting. A senator who's vilified for taking a stand against unemployment expenditures that can't be funded spooks them and me. A fall election looms in front of us that could see a significant change in both the House and Senate and that gives me pause. And the pundits yelling on cable TV don't help the situation either. Many businesspeople I know don't feel it's a great time to make an investment. Business Uncertainty

Deficits are scaring our customers. The numbers are so huge and the government's seeming lack of concern scares them and me even more. We run businesses. We coach Little League teams. We do budgets. We know which kids will pitch and which kids will never in their lifetimes be able to catch a ball. We also know when revenues can't cover expenses. We can't figure out how the government is going to pay for these deficits without increasing taxes. Many of the businesspeople I speak to feel that this is inevitable. My customers don't like uncertainties. They're not thrilled about making investments in this kind of environment. So they don't. And my revenues suffer. No home runs for me this year. My customers aren't hiring. Neither am I. I've written about this before. Our economy is going to be stuck at 10% unemployment for a while. This is bad for all those unemployed people. And it's also bad for my business. Unemployed people don't spend money. And when money isn't being spent, my customers don't make as much money. And they certainly don't expand. So, while they're happy to pay to cover the cost of their operations, they're much less inclined to make the capital investments (which in my case means software) to meet the needs of their business. The overall environment is not conducive for investments. In the current cycle (and these things are cyclical), greed is bad. Poverty is good. Wall Street financiers are criticized for taking home bonuses and legislation is proposed to stop them. Big car and insurance companies that should have been left to fail are taken over by the government. The mob rules right now. My customers do not want to give their shareholders or that public any indication that they're spending on "unnecessary" things like technology or infrastructure. So they stay put. So how do we, as business owners, respond to this? The same way that a Little League coach deals with his left fielder who keeps standing in foul territory. We adapt. Small Jobs

For starters, no job is too small. Until we're able to shoot a moose, my company lives on nuts and berries. Jobs that many of us would have laughed at a few years ago are now putting gas in our tanks. Two hours here. A few hours there. It's all good. It keeps my guys busy. Every customer is valuable. Every job is important. It's actually embarrassing to admit to myself that I didn't think this way during the boom times. Shame on me. As I mentioned, we're definitely not hiring. And neither are most of my customers. And I won't hire until my people are screaming for mercy. We're nowhere near that stage right now. If I do need an extra set of hands, I'll outsource first. There are too many good contractors out there to do the work for me and too many easy ways to connect and communicate with them. When I do decide to hire more employees, it will be because my customer demand is forcing me to do it and it makes good economic sense. Tax credits are zero incentive for me. And for most of my customers, too. If we're spending anywhere, it's on marketing. Lead generation. Web site upgrades. Social media. E-mail campaigns. Telemarketers. Business owners are hustling now more than ever before. The work isn't coming in like it used to. We now need to go out and hunt it down. We're returning calls quickly. We're not delaying our quotes. We set appointments fast and visit prospective and current customers way more often than we did in the past. Because, other than those mediocre guys we hired in the past, we know that we have the ability to make that sale. And more than ever, we're looking, looking, looking for that next prospect, that next deal, that next job. They're fewer and far between for some of us right now. So we're getting up earlier to find them. My kids are older and my Little League coaching days are over. I was a pretty decent Little League coach. I made sure everyone got in the game equally. I never argued an umpire's call. I learned which kids to stick on the mound…and which kids to hide in right field. And I always, always stressed the importance of base runners, hitting for average, playing small ball. But I loved that one kid who, at the age of 12, could hit a ball 300 feet. I'm looking forward to a few homers like that for my business someday, too.


Cash Is for Losers
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