There has recently been talk in Congress of increased funding for small businesses that would target the industries hardest hit by the pandemic. It’s always a good idea if you’re a politician in an election year to hand out more money. But – given the trillions already doled out (and all the reported misuses of those funds) – is there really a need for more relief for small businesses?
The answer is no.
Not that we do not have our challenges, of course. Rising prices and labor shortages are creating headaches for almost all my clients. Independent repair shops can not get inventory due to disruptions in the supply chain. The seafood sector companies are affected by Russia-Ukraine war. And minority businesses continue to struggle.
Republicans want everyone to believe that things are going terribly for small businesses and that everything is the fault of the Democrats. The Democrats, including the White House, say there is a “new boom of small businesses” and that their party feeds. Both parties can discuss the data to prove their points. But they see what I see? I do not think so.
My business serves over 600 small and medium businesses across the country, and I speak to these business owners (and many others in my community) frequently. Over the past few months I have traveled to Florida, California, North Dakota, Wisconsin and other beautiful places where I have spoken to and with over a dozen industry organizations representing companies that sell corrugated containers, building materials, financial services, foam, insulation, tires, auto parts and equipment and, here’s what I found: they’re doing well.
American small businesses in 2022 are generally doing very well.
Because I write a lot about small businesses, I read a lot of reports. Like the recent one from Oculus, a document automation platform, which reports that across its customer base across multiple industries, small businesses have average daily cash balances nearly 80% higher than 2019 levels. Or the report from the Bureau of Economic Analysis, which found that corporate profits – both large and small – “jumped” 25% from last year, the biggest annual increase since 1976.
I read the latest report on the global state of small businesses published recently by Facebook’s parent company Meta, which revealed that approximately 54% of the 24,000 small and medium-sized business leaders in 30 countries and territories surveyed reported higher sales or stable sales compared to the previous year. , a number 6 percentage points higher than July 2021 levels. I also saw in another report by small business finance provider Guidant Financial that 65% of business owners said they were profitable and 83% between them expected their business to survive the COVID-19 pandemic.
I follow the monthly reports from the National Federation of Independent Businesses closely, which flow from its members, and know that small business optimism and earnings, while down from their all-time highs, remain relatively strong. and at levels similar to what we have seen over the past decade. I’m learning from this report that small businesses are increasing what they pay workers and are looking to hire massively. The data I have read from ADP and Paychex payroll services also confirms this.
I love watching economic data, and although projected GDP growth has slowed, I still see that services and manufacturing industries are seeing growth, airport traffic is approaching pre-COVID levels, diners are returning to restaurants and the construction industry – which indirectly and directly affects countless small businesses – is strong.
Nearly three-quarters of U.S. counties have seen a net gain in businesses since the start of the coronavirus pandemic, according to an analysis of federal data released Tuesday. Startups are also on the rise, with nearly 5.4 million new business applications filed in 2021, according to data released earlier this year by the US Census Bureau, which is an all-time high and a 23% increase from 2020 ( a record year with 4.4 million new requests).
And what about access to capital? According to a recent report, funding for small business loans jumped 27% in 2021, with the average loan exceeding $700,000. Bank approval rates continue to rise, according to a monthly analysis from small business finance firm Biz2Credit. Local grants and funding are available in areas from Maine to Missouri.
There are 30 million small businesses in this country. Six million of these are employer-owned businesses. Believe me when I say they will always have problems. In the past, people complained about lack of demand, over-regulation, lack of capital and rising taxes. This year, it’s inflation and work. Next year, it will be the same thing, with an increase in interest rates. Some companies will do better than others. Some industries will experience faster growth. Some companies will go bankrupt. Some will thrive.
But the government can not simply distribute free money every time this happens. The unprecedented economic impact of the pandemic is over. The risks and uncertainties relating to an enterprise management never will. This is why we chose this life. The best thing Congress can do is provide a better regulatory environment for us to enjoy – and take our chances to succeed or fail.
Gene Marks is the founder of The Marks Group, a consulting firm for small businesses. He appears frequently on CNBC, Fox Business and MSNBC.