Bad Financial Times And Entrepreneurship

SyskittyAccording to the University of Maryland, small businesses are beginning feel that they are healthy enough to the point where they’re considering hiring more people.  Some of the more chirpy spins on this article say that it could mean up to 3.8 million new jobs this year and reduce unemployment by over 2%.  That would be lovely for the ones out job hunting who haven’t given up — though the pay scale is likely to be low.  In this economy, many people (like the history teacher who was waiting tables at the restaurant where we ate last night) are ready to work at almost any job that gives them some sort of income.  I’ve seen some self-announced Internet business experts say that this means this year is the perfect time to start a small home business — perhaps by becoming an affiliate or joining MLM.

 

It sounds lovely.  Makes you want to run out and start a small business, right?

 

The problem with this logic is that what the news reports mean by “small business” and what most of us think of as “small business” are as different as cats and cows.  To the newspaper or researcher, a small business is something like your little local restaurant.  It has a business address, a business license, pays business taxes, and has employees.  To the rest of us, a home business also is a “small business.”

 

And therein lies a big problem.  The way you handle a small business is different than the way you handle a home business.

 

Although I’d love to have six employees here helping me with my writing and art and internet things, the truth is that I can’t pay them.  Lesley (MaaMaw) got to the point where she was able to hire typists for her medical transcription business, but that took several years.  A “small business” (as opposed to a microbusiness or home business) can go to a bank and ask for a business loan.  If I toddle up there and try to apply for one, I’m going to be laughed out of the bank — but only after I get offered a “personal loan.”

 

The article is right in one way — there’s a lot of people doing small things on the side to try and get through the bad financial times and there will be a lot of these tiny entrepreneurial jobs created to help support families.  I’m not sure what the success rate is on these things (entrepreneurs, as we’ve all found out, often lie about how well they’re doing) but I’d be willing to bet that it’s pretty small.

 

Most of the time, the problem lies in “you want a business but you don’t have a plan.”  So I’m going to blog about plans and so forth — and if you haven’t gone to the Friends In Business site and read MCA Hogarth’s article about mindset and business , you really should do that.  Meanwhile, I’ll be blogging about setting up a business over the next few weeks (along with websites and other goodies) to help folks who are getting started working from home in a small business figure out where to start and how to start and what to do.


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