Some people don't understand how 73 percent of small business owners can remain optimistic about their business futures despite 52 percent thinking it is worse than it was twelve months ago. And even while the financial stressors are considerable, the Pitney Bowes survey reveals most small business owners have two or three more options before they would have to consider closing their companies (hat tip: MarketingProfs). Even if they did, 28 percent would start a new business.
Top Financial Concerns For Small Businesses
• 74 percent say decreased sales is their top concern.
• 52 percent say health care costs are a top concern.
• 42 percent say late payments from customers.
• 42 percent say greater restrictions on corporate financing.
But there is something else too. Small business owners tend to be among the most adaptive and resilient during the worst economic conditions. They tend to be optimistic even in the face of adversity, especially those that had the audacity to start their businesses during a recession.
It strikes at the heart of the challenge. Many small business owners opted to believe that the recession was optional. It was a case I made on a couple of occasions during the last two years, asking leadership to start by engaging their employees.
Some bigger companies agreed with me too. You can see it based on performance. United Services Automobile Association, Republic Services, Wells Fargo, Dollar General, Visa, PNC Financial Services Group, JPMorgan Chase & Co., CenturyTel, Merck, and O'Reilly Automotive (among others) all posted profit gains of 65 percent or more. For them, the recession was optional.
And while we all might wish that the media covered more success stories to help lift the general population out sooner, most were too busy covering the recession. In fact, most were covering the pending recession as much as two years before it happened. Now, many news outlets are trying to shift the story in a new direction; expect to see more success stories soon.
What Makes Some Companies Succeed And Others Fail?
The only answer is their outlook. Earlier today, Ernie Varitimos shared a link to his video about winners and losers as it relates to investors. While there is a certain combatant mentality in the video that I don't personally share, Varitimos nails the psychology of it all.
He applies it to investing, but it accurately describes the relationship of trends and reversals to several arenas. As he points out in his video lesson, trends are easy because they move in straight lines and, unless you're a loser, you follow the trend to the end. That is how many companies, good and bad, made money in the last three decades. You didn't have to be good. You only had to follow the trend.
Reversals are not so easy. It begins when one trend ends and another begins, marked by a change in attitude. Basically, when the trend changes, people who were winners during the trend begin to feel like they are losing control. And as they lose their belief in themselves, this allows others — the anti-group as Varitimos calls it— to snatch control away from them. How does it happen? In defending their position, the previous followers make mistakes and eventually lose.
It doesn't just happen in investing. It happens in politics. It happens in business cycles. It happens with marketing. It happens in social media (with blog traffic or whatever). The psychology of success is directly linked to the optimism of leadership and their willingness to adapt to changes in the marketplace. It's also why my company will end in a better position than when the recession started. How about you? How are you doing today?