What is Business S.O.S.TM?
Business S.O.S.TM is a Business Innovation Solutions Firm
After twenty-five years of running one of the country’s top ad agency for luxury advertising and marketing I found myself in a financial struggle that had far greater implications then I had foreseen or imagined. Faced with a series of economic challenges I became shockingly aware of the quantum systemic changes that were rapidly underfoot which our government and leadership simply failed to address or identify. Like many of the world’s top economists and writers have observed, I found myself one among millions of entrepreneurs living in “survival mode” inside this continued dysfunctional global economy. Now with the fallout of Covid-19 we find ourselves once again on the shorter side of the economy in a decade after the Great Recession.
Most American small business owners are just like me – someone educated enough to develop skills in a selected area or areas of trade, but not able or aware of all the “mitigating nuances” in today’s markets to incorporate new business models or practices at a rapid enough pace to keep up with our highly competitive, giant, monopolistic global corporations.
Having operated a successful advertising agency, I found myself in the perfect storm of today’s business challenges. After more than twenty-five years of doing business with an average revenue of at least $25 million in annual sales and with clients’ annual spending levels of $500,000 To $12 million, I had the proverbial wind knocked out of me in the Great Recession of 2008 and now it is happening again as a result of social distancing and shut downs due to Covid-19. This horrific turn of events took my long-standing business to the precipice of near annihilation in a matter of weeks during the Great Recession. Of course, I had contracts and commitments through 2009, but by the middle of 2009, my business, which was considered one of the most sought-after firms in the luxury goods sector, was basically on life support. Clients were calling on a daily basis to cancel work or to reduce their budgets significantly.
While the collapse of the U.S. financial sector in 2008 was the final blow, and now shut downs of most sectors but healthcare, the structure of small businesses in America had been disintegrating for over a three decades. In the case of my business, the bursting of the dot-com bubble in 2000 left me staggering due to lost capital. Then, in the luxury goods industry the terrorist attacks of September 11, 2001, produced shockwaves through the U.S. consumer base that essentially turned off the facet for luxury purchases. In effect, consumers devalued luxury goods in response to such a jolt to America’s core. Businesses in New York City–where a portion of my business operated–were particularly affected by this withdrawal.
However, as a result of the economic shocks throughout the 2000s, my previously thriving business faced a critical threat. As my bottom line became increasingly lean, I scratched and clawed for a solution. But, like most small business owners, we start with a dream and a passion, and just keep plowing forward into the unknown.
We all believed what we read and what we were told – that a great idea mixed with hard work is “all you’ll need to accomplish your dreams.” This belief in The American Dream as a real possibility is the cultural ideal that has made America the greatest nation in the world. However, Joseph Stiglitz warns in his book, The Price of Inequality, that without fairness and balance in our economic systems, a system that is historically based deeply on “American values,” the perception of America as “the land of opportunity,” our “power,” our status, and our standing in the world will be diminished–significantly weakening our markets further.1
This “dream”, of course for me, had come true. Not only had I operated my business successfully for over twenty years and thought that I would sell or pass my little empire on to my daughter, it had become a machine that I thought was unbreakable unless I decided otherwise. So how is it that after more than twenty-five years of learning to be a good business stewardess I could find myself in near collapse? Now with covid-19 the challenges return but even more dire.
Looking back, I see that the answer lies in the changing structure of the economy. Even prior to the economic downturn, capital markets were drying up for small businesses and technology had rendered business models like my own obsolete. Cheap media alternatives of the Internet and social marketing accelerated these structural changes even faster. Clients had virtually no sales, and therefore very little margin with which to advertise. Millions of small businesses found themselves in the exact situation I was in and this duress continues and is cyclical again and again..
Faced with these quantum changes, we must stop listening to the generic “advice corners” and those that simply pontificate on what can and should be done and rather attack these issues ourselves.
I came to the conclusion that we could change the tides by more of us facing “the truth” and relying on each other to provide whatever it is that each of us needs to excel in our individual, community-based businesses. We could actually resuscitate one business and one community at a time and, eventually, even our country if we establish our own network – A Small Business Network specifically targeted to help companies in S.O.S. This Network would not have the typical bates and switches to creating and increasing revenue. This Network would be without the typical risk to reputations when disclosing personal or proprietary information. This Network would not take advantage of a business in duress in any fashion. This would be guaranteed in writing and based on true American values of helping ourselves by helping each other with ethics and honor. We are calling this network, Business S.O.S.TM
I have discovered several important alternatives, methods, and resources supporting “how we can help ourselves by helping each other” and will outline them in this article. Taking alternative courses of actions and completely rethinking about how to actually conduct all aspects of business is what re-launched my own business and will be the mechanism to help thousands more finally get out of survival mode or look to bankruptcy as an alternative can become thriving and profitable once more.
Business S.O.S.TM does not pretend to be a magical cure-all, nor should it be. What Business S.O.S.TM does promote though, is innovative, specialized, and sustainable solutions for struggling small businesses. Further, it is an acknowledgement that each small business is unique and deserves specialized attention and resources that led to the development of the Business S.O.S.TM Network. As the following pages will describe, this interactive network will form the foundation for a renewed era of small business expansion.
The Truth Behind the State of American Small Businesses Today
The research and data compiled for this article takes as given that many of America’s small businesses are in a state of distress. It seeks to identify the many forces making this the situation. It also offers one solution that will relieve that stress and help drive economic growth.
I have taken my personal experience and–through the shock and horror of finding myself in completely different life circumstances than I ever planned or expected–have researched and studied how the disconnect between traditional approaches and current needs happened to my firm and millions of other entrepreneurs around the US. We cannot wait for the toxic economic environment to be restored or when covid-19 ends before we undertake the task of mending and retooling our businesses. We need to find a solution to help others and ourselves. Through my search, I have found some answers and have laid out my findings for public evaluation.
The Main Aspect of all Business is Sales.
The U.S. market economy has a shrinking middle-class consumer base, and most small businesses trade only in their immediate local or regional markets. We seek out through a variety of methods to cultivate new clients in these markets but find that even with new and innovative ways to communicate the consumers simply do not have the spending capability. This issue is even more exasperated because of Covid-19. Yet, Wall Street and large corporations continue to have growth and even record profits. The complete disconnection between Wall Street and Main Street America arises from these basic issues. Why is it cutbacks and downsizing or closure for businesses that are community and regionally based? Why do we hear so much political rhetoric regarding small businesses, but seldom see any action? Why is this not the social imperative of our times? Most importantly, why is there so little help? In all of my research, I have come up with a few viable programs and institutions that offer substantive advice and services for small businesses, which is inadequate help relative to the sheer numbers of businesses in survival mode.1
Small Businesses are the Majority
The U.S. became the number one powerhouse in the world–and developed a strong consuming middle-class, an ethical productive workforce, and innovative energized entrepreneurs–because of its growth of small businesses. A small business is defined as any corporation or entity that employs 500 people or less. Based on the statistics from the U.S. Department of Commerce, Census Bureau, and trends from the U.S. Department of Labor, there are approximately 28 million registered businesses in the United States. Of those, 99.9 percent of all employing firms are considered small businesses.2 I call these the 99 percenters. Consider the following statistics taken directly from the Small Business Administration’s (SBA) website: 3
How Important Are Small Businesses to The U.S. Economy?
Small firms:
- Represent 99.9 percent of all employer firms
- Employ about half of all private sector employees
- Pay 43 percent of total U.S. private payroll
- Have generated 65 percent of the net new jobs over the past 17 years
- Create more than half of the nonfarm private GDP
- Hire 43 percent of high-tech workers
- Are 52 percent home-based and 2 percent franchises
- Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2020
- Produce 16.5 times more patents per employee than large patenting firms
Small businesses are the job creators. They currently employ around 54.7 percent of the U.S. workforce and account for 65 percent of new jobs created between 20010 and 2020. Right now, we are struggling with a massive need for jobs. The latest release (January 15th 2021) from the U.S. Department of Labor reports an unemployment rate of 6.7 percent; however, this figure does not take into account individuals who are underemployed which is running at 15.1percent in 2021, those that were forced into early retirement and are now counted on the SS and Medicare figures, or have dropped out of the labor force because they simply cannot find jobs and an additional 17 million college graduates who cannot find work or jobs related to their degree. Taking all these figures into consideration, we can calculate an astounding underemployment rate of 21 percent. That means that there are 28.5 million unemployed and underemployed Americans. It is also reported that only 58.8% of all able-bodied adults are unemployed in the US as of 2020. Shocking figures for the number one advanced economy in the world. 4
The Solution
Small businesses are the engine that drives employment, innovation, stability, and growth. The lack of focus on small business is a missed opportunity. The figures shown in the previous section indicate that one solution to our unacceptable unemployment lies within this large body of motivated companies. Right now, government needs more revenue to address the already record national debt. Much of our political discourse about small businesses is about tax reduction. Many businesses are not profitable enough during these tumultuous times to be worried about taxes; they would be better served with a redirected government effort. The taxes small businesses have paid historically support our city, county, state, and federal systems, and now all of these systems are in distress. Hence, we hear the call for cutbacks in governmental spending. Yet, the size of government continues to increase. The complete story is what makes our political environment toxic and ever more confusing to the average individual. This idle engine, the small business, could provide the catalyst for recovery. It is simple arithmetic based on the research that if small businesses provide 65 percent of new jobs, then they will generate the supporting revenues for city, state, and federal projects as well. One plus one does equal two key components for decreased unemployment and increased GDP.5
The Invisible 99 Percenters
I think we are all aware of the complexity in the political discourse today. It is well documented that there is more divisiveness in Washington than ever before in our history. I believe the assumption that the Occupy Wall Street or Black Lives Matter movement is a group of leaderless individuals who want a short cut in life is a falsehood. We have all witnessed the argument that they are disenfranchised groups economically and racially that are not willing to work and do their fair share, but want government programs and subsidies to help them through the tough times. Yet, after reading and seeing many interviews with individuals who are considered occupiers–such as Alexis Goldstein, former vice president of Merrill Lynch and extensive writer on the “Volker Rule,” which would ban speculative “property trading” –by our big banks. We also know the founders of the Black Lives Matter organization want economic opportunity and jobs along with social justice and safety. I believe most Americans are concerned with the same issues: social and economic inequality, greed, corruption, and undue influence of corporations on government. Many of their comments and concerns were similar to 63 percent of the country that thinks banks should be regulated and there should be more fairness. Banks and monopolies should not be allowed to be so large that they could again bring down the entire financial system. The “occupiers” and the Black Lives Matter Coalition where other groups that saw and addressed the disparity between 99% of us and the top 1%. 6
Many of this type of organizations had a profound effect on bringing the frustration we have all been feeling to the national forefront. Having gone down the rabbit-hole myself, the single-most potent issue is this: we no longer share a fair country–a break from the ideal we have all been taught in school. Instead, so much of the economic power of our nation is in the grips of financial institutions, Wall Street and large Corporations.
“Bank loans are the only way most people can dream of starting a business or buying a home. Our biggest banks, drunk on leveraged profits, abused government guarantees to bet against our houses for their own gain, then picked our pockets when it went bad, breaking that bond of trust in our banking system.” Says Alexis Goldstein.
This summarizes something that many of us have already thought or experienced.7
I believe one of the simplest assumptions in this article is also the most eye opening: most of us are part of these 99 percenters. Whether we call ourselves Coalition for a Fairer America, or Tea Party members many of us agree on some pretty basic issues. If one ventures to be informed, then one would believe, as I do, that this country has stopped being about and for the people. We need to rebalance our political system. We need to invert the hierarchy of power and make some hard choices. The power to make big changes in our economy lies within the focus of this large, highly productive enfranchised group, small businesses.
Shrinking Sales, Shrinking Salaries
In the Great Recession, I saw my company’s revenues drop from $20 million to $2, not overnight, but in a drip-drip-drip fashion. I had to reduce salaries paid by my own business, and I witnessed their ultimate effects on families and communities throughout the last ten years. I had to pay less to my highly skilled “creatives” simply because my margins were shrinking. As I had to decrease salaries, my own workforce began to do less and less. With less productivity and a reducing demand for my services, I began to see my once thriving, productive business begin to decline. At the same time, without a complete understanding of all the forces at play, it was impossible to evaluate and correct the situation. I can honestly say that after a twenty-year run with very healthy margins, I was clouded by my own success to see that I was in economic denial–the inability or unwillingness to acknowledge the real situation quick enough to prevent or change the inevitable.
Such denial—that once existed is a raw reality after the impact of Covid-19. The media adds to this confusion through their emotional discussions, “opinionations,” and exposés, making it impossible for the average business owner to extrapolate needed information that could help in their everyday decision-making.
For example, we used to rely on the stock market to give us an indication of consumer confidence. Now, because there is little correlation between the health of our markets and the cash flow on Main Street, I believe the stock market is what has most of us paralyzed and confused. Many of my colleagues still want to believe that they are part of the top 1 percent. This is delusional when you look at the fact that businesses with 500 employees or fewer are considered small and that over half of those businesses are based in the home.8
Once the majority of us face the fact that we are the invisible 99 percenters, we can work together to resolve and correct what has happened too many of us.
The U.S. is Functioning with Two Totally Different Economies
In a recent article in The American Interest, Tyler Cowen identifies two interrelated, but very different American economies. There is a Globalized Trade Economy in which companies must compete with everyone, everywhere. These multinational corporations have become relentlessly dynamic and brutally efficient. The other Non-Global Trade Economy encompasses a slower pace of change and growth due to a lack of capital, innovation, and a smaller and less competitive trading area with much less growth in consumer demand. This second economy has the capability of producing more jobs, but does not have the productivity gains because of this lack of demand. This is, also, where most Americans actually live and trade.9 In general, this is how the two economies compare:10
Globalized Trade Economy | Non-Global Trade Economy |
The GTE is producing the majority of productivity gains, but it is not producing jobs in the U.S. | The NGTE is creating some job growth in the U.S., but very little revenue gains |
The GTE has access to an almost inexhaustible source of capital with trillions of dollars in reserves | The NGTE has access to only limited or no capital |
The GTE has a larger, faster growing Global Middle Class | The NGTE faces declining numbers of consumers whose incomes are declining as well |
For the GTE, life is good and has a relatively promising future | For the NGTE, their mantra seems to be “We’re all on our own” |
Large, multinational corporations have large capital reserves, smart technologies, and a growing global middle-class to whom they may sell their products or services. Of course, along with all this money, power, and influence, they get to lobby for the most lucrative contracts and policies.
Professor Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics, is a global expert on inequality. He has focused on the U.S. economy in his book, The Price of Inequality. In it, he notes “rent seeking” activities, such as the involvement of the political process to extract “gifts” from the government at the expense of the rest of society.11
Rent seeking takes many forms: (1) hidden and open transfers of subsidies from the government, (2) laws that make the market place less competitive, (3) lax enforcement of existing competition laws, and (4) statutes that allow corporations to take advantage of others or to pass the costs on to the rest of society. The term rent was originally used to describe the return on land, since the owner of the land receives these payments or resources by virtue of his ownership and not because of anything he does. Countries rich in natural resources like the US are famous for their rent seeking activity.12
We are now subject to a variety of rent seeking activities that are seriously affecting the health of our small businesses while perpetuating and enhancing large corporations is at an all-time high. The media adds to this confusion through their emotional discussions, “opinionating,” and exposés, making it impossible for the average business owner to extrapolate needed information that could help in their everyday decision-making.
For example, we used to rely on the stock market to give us an indication of consumer confidence. Now, because there is little correlation between the health of our markets and the cash flow on Main Street, I believe the stock market is what has most of us paralyzed and confused. Many of my colleagues still want to believe that they are part of the top 1 percent. This is delusional when you look at the fact that businesses with 500 employees or fewer are considered small and that half of those businesses are based in the home.8
Once the majority of us face the fact that we are the invisible 99 percenters, we can work together to resolve and correct what has happened too many of us.
The U.S. is Functioning with Two Totally Different Economies
In a recent article in The American Interest, Tyler Cowen identifies two interrelated, but very different American economies. There is a Globalized Trade Economy in which companies must compete with everyone, everywhere. These multinational corporations have become relentlessly dynamic and brutally efficient. The other Non-Global Trade Economy encompasses a slower pace of change and growth due to a lack of capital, innovation, and a smaller and less competitive trading area with much less growth in consumer demand. This second economy has the capability of producing more jobs, but does not have the productivity gains because of this lack of demand. This is, also, where most Americans actually live and trade.9
In general, this is how the two economies compare:10
Globalized Trade Economy | Non-Global Trade Economy |
The GTE is producing the majority of productivity gains, but it is not producing jobs in the U.S. | The NGTE is creating some job growth in the U.S., but very little revenue gains |
The GTE has access to an almost inexhaustible source of capital with trillions of dollars in reserves | The NGTE has access to only limited or no capital |
The GTE has a larger, faster growing Global Middle Class | The NGTE faces declining numbers of consumers whose incomes are declining as well |
For the GTE, life is good and has a relatively promising future | For the NGTE, their mantra seems to be “We’re all on our own” |
Large, multinational corporations have large capital reserves, smart technologies, and a growing global middle-class to whom they may sell their products or services. Of course, along with all this money, power, and influence, they get to lobby for the most lucrative contracts and policies.
Professor Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics, is a global expert on inequality. He has focused on the U.S. economy in his new book, The Price of Inequality. In it, he notes “rent seeking” activities, such as the involvement of the political process to extract “gifts” from the government at the expense of the rest of society.11
Rent seeking takes many forms: (1) hidden and open transfers of subsidies from the government, (2) laws that make the market place less competitive, (3) lax enforcement of existing competition laws, and (4) statutes that allow corporations to take advantage of others or to pass the costs on to the rest of society. The term rent was originally used to describe the return on land, since the owner of the land receives these payments or resources by virtue of his ownership and not because of anything he does. Countries rich in natural resources like the US are famous for their rent seeking activity.12
We are now subject to a variety of rent seeking activities that are seriously affecting the health of our small businesses while perpetuating and enhancing the economies of globalized businesses. For example:
- Fluctuating interest rates, trading fees
we all suffer from through credit card services
- The inordinate amount of fees charged for
banking services
- Energy companies gaining total ownership
of our natural resources like coal, oil, and gas (and we even provide tax payer subsidies on top of this), all the while our own resources are priced according to and sold in the global markets
- Public and private companies running us
prisons and, now, opening and purchasing schools at lower than market value and then we pay top dollar for their services they provide to our criminal, court and educational systems;
- Defense contractors are probably the most
egregious as they have little or no competition or oversight in order for the citizenry to even evaluate these high costs.
All of these factors are what has initiated the “too big to fail” paradigm that nearly brought our country to the brink of a depression, and keeps our markets fragile and our growth stagnant. It used to be un-American to be a monopoly; now it is de rigueur. Any consultant or business school teaches in basic economics that, anytime there is only one large client or supplier, the system is at high risk should that large entity falter or become insolvent. Further, control of a market from a single firm allows for an unfair allocation of resources. Either way, the results of monopolistic firms bring consumers to their knees. Amazon has rendered our retail sector obsolete. Corporate oversight and antitrust laws were enacted to protect us from these ills. What happened to their enforcement? Small businesses have been seriously injured in this unfair playing field.
The complexity of our current markets without the education, knowledge, and collaboration of all small businesses will be our biggest obstacle unless we act in a strategic manner.
Small Business Could Ignite a New Era of Economic Nationalism
The U.S. is in dire need of small business revitalization. Part of this is a call for all employees to have a newfound commitment for their small business owners and the need to work harder than ever, but for a fair wage. Employers of these small businesses need to dig themselves out of this mess.
American pride and our drive to win have faltered. Yet perhaps it is our pride that has kept us from being adaptive and resourceful. We are thinking that what worked in the past should work in the future. We need to work differently at all levels in order to fight for our country’s survival after covid-19.
Let’s put two ideas together. Small businesses, we said, are 99 percent of all businesses in the U.S. and the Main Street economy. In contrast, Globalized Trade corporations are the other 1 percent and have all the growth (think stock markets) and benefits of our economic system. One cylinder of our economy is firing; the other is just barely pumping along.
Now, let’s just focus on the 99 percenters and what we, as a group, are willing to do to save our country and ourselves. I believe there is a strong willingness among Americans to suffer the pains of economic restructuring in order to right this economy for the good of our society. It will be daunting, but when aspiring toward a noble cause, Americans have shown we stand up for what is necessary and right.
Actor Jeff Daniels on the HBO series, Newsroom, addresses this national tragedy through the writing of Aaron Sorkin when asked, “Why is America the greatest country in the world?” When pushed, he replies, “We are not the greatest country…we lead the world in only three categories. One, we have the highest rate of incarceration per capita.” In fact, we have 5 percent of the world’s population, yet we boast 25 percent of the world’s prisoners.13 “Two, we have adults who believe in angels.” He does not mention how many U.S. citizens do not believe the data on global warming and a myriad of other scientific facts including the scientific evidence to wear a mask to protect yourself and others during Covid-19, and keep themselves inadequately informed or biased towards others’ opinions rather than the facts. “Three, we lead in defense. We out-spend 26 leading countries, of which 25 are our allies.” We spend more time “nation building” in Iraq and Afghanistan than we do fixing our own infrastructure. Then, he goes on to say, “We used to be great! We always stood up for what was right. We fought for moral reasons. We waged war on poverty, not the poor. We aspired to intelligence not belittle it. We explored the universe and nurtured the greatest artists and innovators and the greatest economy… In order to solve a problem, we need to first recognize we have one, and then we could be great again.”14
I believe in the body of the 99 percenters, we have the same stuff that made us great in decades past–a will and a drive to do whatever it takes. We need to do what is necessary before it is too late. The strains of an economic restructuring will be painful, but educating and training our workforce, and retooling our businesses simply must occur for future sustained growth. The small business owners, with the help of their employees, have the grit to make it work once again.
Small business owners do not want a hand out, but we would like an even playing field. Many of us cannot collect unemployment even when our businesses fail or cannot support our salary. That is why unemployment is down. Many are singular proprietors. We are willing to work 10-, 12-, or even 16-hour days to figure out how to retool and revitalize ourselves. But, we need to do this together. We need to network and pool our resources so that we can neutralize forces that hold many of us back. Our creative, natural resource is our pride in American ingenuity. Through technology, we can achieve the connectivity we need to communicate–and by instituting a rethinking about how we approach each other as businesses–we can integrate and effect real progress. Business S.O.S.TM is not just a resume sharing social media network but a place across channels that provides the pro-active tools to fix each and every small business that is in need of resuscitation.
Twelve Years After the Great Recession and We Are Still in Survival Mode and We Get Hit with a Pandemic!
I know we all feel it, those of us in survival mode or even desperation. Many times, each day, it seems, I get phone calls to buy things. I contact firms to make overtures about my business services but companies do not want to be sold, “In Google They Trust”; they want to find you and buy you, a complete change from a traditional sales offering. Potential clients or customers are treated like a numbers game. For every quick contact, they can get 1 or 2 percent sales. Technology is great, but such human robo-calling also creates walls. It is more difficult than ever to break through.
Business S.O.S.TM makes an appeal to all companies large or small to stop this lack of sensitivity to what is a pervasive business climate of disconnect in a fluid, horizontal world, network with Business S.O.S.TM, and pool our talents and resources to help other companies get out of this pervasive lack of profitability.
Our workforce needs to rethink their approach to ownership and management. When my business began to bleed, I had employees who had worked for me for over 16 years. Cutting their salaries and benefits was emotionally difficult and, as I referenced before, it did not help; all it did was build resentment. I was literally spending my savings to keep the company afloat. When I tried to explain these financial realities, there appeared to be a disconnect or they simply did not believe me. It was a critical moment for the company. Restructuring will be painful, but educating and training our workforce, and retooling our businesses simply must occur for future sustained growth. The small business owners, with the help of their employees, have the grit to make it work once again.
Small business owners do not want a hand out, but we would like an even playing field. Many of us do not collect unemployment even when our businesses fail or cannot support our salary. We are willing to work 10-, 12-, or even 16-hour days to figure out how to retool and revitalize ourselves. But, we need to do this together. We need to network and pool our resources so that we can neutralize forces that hold many of us back. Our creative, natural resource is our pride in American ingenuity. Through technology, we can achieve the connectivity we need to communicate–and by instituting a rethinking about how we approach each other as businesses–we can integrate and effect real progress. Business S.O.S.TM is not just a resume sharing social media network but a place across channels that provides the pro-active tools to fix each and every small business that is in need of resuscitation.
Twelve Years After the Great Recession and The Added Challenge of Covid-19 Shut Downs!
I know we all feel it, those of us in survival mode. Many times, each day, it seems, I get phone calls to buy things. I call large firms requesting information. These companies are also in survival mode, and the moment I ask to get help, or at least some direction, my calls are shortened. Potential clients or customers are treated like a numbers game. For every quick contact, they can get 1 or 2 percent sales. Technology is great, but such human robo-calling also creates walls. It is more difficult than ever to break through.
In this book, I am making an appeal to all companies to stop this, network with Business S.O.S.TM, and pool our talents to help other companies–all of us–get out of this mess.
I am also beseeching workers to rethink their approach to ownership. When my business began to bleed, I had employees who had worked for me for over 16 years. Cutting their salaries and benefits was emotionally difficult and, as I referenced before, it did not help; all it did was build resentment. I was literally spending my savings to keep the company afloat. When I tried to explain these financial realities, there appeared to be a disconnect or they simply did not believe me. It was a critical moment for the company. I was disappointed when I found that employees simply did not understand how each small business owner has his or her life in their hands.
Employees are the heart of any business success, and I needed them to outperform during this time. Believe me, I made many mistakes. Surely, one of them was that I did not level with my people and tells them the true state of my own economy. Perhaps I feared a show of weakness in a very competitive market would not be helpful to my business. My competitors could use it to sell against me. Clients need to feel your solvency is assured before they initiate jobs and production.
Small businesses need to realize that it is too late for pretense–the situation is that dire. We need to stop such opaque business practices, face the facts about our own businesses and the economy, and bring back our workforce work ethic and our true American values of helping our neighbors, thereby aiding our country in order to circumvent the fiscal cliff we are facing.
It is painful to accept responsibility. Perhaps your business is doing well. Perhaps you were very conservative with your capital and can weather the storm presented by covid-19. Could you then be a sponsor or volunteer to help another business do the same thing? The networked revitalization of small businesses across the U.S. will reduce unemployment, develop growth in our GDP, and ultimately benefit both those small businesses that are currently struggling as well as the few success stories. This type of social consciousness is the social imperative of our time. Become an activist but this time not for the myriad of great causes but for your country and its basic survival.
The Stats: Five Charts That Need To Be Viewed Together
Part of my expertise is working with media and communication. With mainstream media’s deregulation and its fractured, entertainment-based 24/7 news channels, media conglomerates have a platform to communicate any information that draws the highest ratings, produces the highest advertising income, or helps to consolidate their political agendas. With lax FCC regulations, reporting the issues in a fair and balanced manner for the public good is simply passé because it’s not profitable. For most small businesses, it is a good part of our continuing education both as consumers and as story ideas. The internet and information technology has added to the disinformation network.
Hence, these distortions of information from both political parties are impeding a higher level of knowledge and public discourse on all of the issues. It is imperative that, as this level of dysfunction in our markets continues, we get the facts right and sift through the information – not to release our frustrations, but to resolve and recast this entire moment in our country’s history and see that our health and the health of our small businesses as the catalyst to making our country grow and regain the status of the greatest country in the world.
When viewing these charts, graphs, and information, we see that by working together small businesses are the majority, the job creators, and the important coalition to change how business is conducted in America. Overwhelming media silence about or distortions of the facts has kept small business owners from seeing themselves and their customers–or even their trading area–as part of the big picture of economic events. Stocks are up, and everything is fine–no, really. Meanwhile, small business owners remain unaware of the vortex of forces eating away at the foundations of their businesses. As a result, they cannot react to this gnawing damage. The vast majority of us are considered the minions who need to be fed information in a half-baked format, but this does not need to be the panacea. We can work together to inform and assist each other in order for us to effect the big changes that are needed. Here are several things we need to know.
- Small businesses are dying and new ones are not on the rise
The chart below shows that the belief in the American Dream is dying. The land of opportunity is no longer inspiring individuals to take risks and start something new. According to the U.S. Department of Commerce, U.S. Department of Labor Statistics, BED Business Dynamics, with estimates based on 2020 Census Bureau Data, the smallest number of new businesses were created in 100 years of recording.
In 2009, we begin to see a sharp decrease in births of new businesses. With nearly half the number of Americans even attempting to start a new business in the years following the Great Recession, the tripling of closures and bankruptcies is an even more disturbing figure. Each political party will utilize these figures to suit their purposes. It is evident that no matter whom you vote for these trends will continue.
Even though small businesses comprise 99 percent, our contribution to the GDP is dwarfed by the massive corporations controlling the financial, health care, and energy sectors. Look at this from a pragmatic standpoint, and you will understand why it is imperative to send out this call-to-action. It is not only important to network our resources in order to pull ourselves out of survival mode; we need to merge these assets to level the playing field, once, and for all.
The next graphs show the drastic increase in bankruptcies in 2012 for individuals and businesses.16 As I know I am speaking to a group of concerned business owners; this should put the proverbial “Fear of God” in you to see how many of our colleagues have lost the fight. I do not think there is anything more painful or shocking than losing your business. The psychological pain of failure and the shock at the speed these bankruptcies are occurring has ramifications on so many aspects of our nation’s economic and psychological health.
We will talk about it in another article, but there is a specific, psychological syndrome that has been identified when someone experiences failure at this level. Not only is this rate of bankruptcies and closures affecting each individual company, it is a trend that is on the rise and has far-reaching implications for our country. If the American ideal of owning your own business is in jeopardy, does this mean there will only be growth in localized service providers such as doctors, lawyers, restaurants, and so forth? Or does this indicate that innovation can only be capitalized by large, global, corporations and 99 percent of us eventually become employees? Is this the start of “corporatization” and the decline of our democracy? A concept the economist Schumpeter discussed in his book Capitalism, Socialism and Democracy when elaborating on his theory that democracies would remain fragile when the vigilance surrounding the balance of power between large and small companies is no longer monitored.
The concerns that we are becoming Greece–founded on the amount of our budget spent on pensions and public services–are real. Labor needs to come to terms with this; the pie is being financed and cannot sustain these costs unless there is consensus. We can see that 22 percent of federal spending is on pensions.17
We simply need the 21st Century methods to restructure these forebodings. It is one of the most stressful experiences to go bankrupt, and, given legislation concerning individual bankruptcies; it can turn a free individual into an indentured slave of his creditors. For most of us, it is not an option, so I offer Business S.O.S.TM as a viable opportunity to these companies.
- The decline in average U.S. incomes
Our consuming middle-class is also dying. With over 46 million Americans living below the poverty line, unemployment high, and our baby boomers moving into retirement, there is simply a shrinking population with the money or the propensity to buy our products or services. As our businesses downsize and lose capital, employees and our own wages, have decreased significantly. I used to make seven figures and had the arrogance that came with all of that buying power. But, like many of you will notice viewing the following chart, I am surely no longer making a million dollars a year as does our top one percent. Further, our top one percent of the top percent is making over $30 million.18
Here is a clear picture of the disparity between the top 1 percent and the rest of us.19
Year | Top 1% Average Income | Top 1% Average Income Including Capital Gains | Top .01% Average Income | Top .01% Average Income Including Capital Gains |
2000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 |
886,975
807,323 757,287 758,111 836,119 924,661 961,856 1,003,791 928,777 814,791 857,477 |
1,282,163
1,010,251 886,947 916,495 1,085,659 1,257,402 1,343,876 1,435,002 1,152,231 913,451 1,019,089 |
15,275,981
12,606,207 11,625,308 12,148,516 14,688,500 17,195,213 17,698,914 19,328,745 17,509,297 14,972,931 16,267,243 |
30,223,559
20,515,521 16,524,086 18,258,783 23,864375 29,421,236 32,149,872 36,853,470 27,691,827 19,631,207 23,846,950 |
I believe many of us have found ourselves in a completely new category. If you are still a member of the top 1 or 2 percent then hopefully, you will see there is something your firm could do to actively assist in the revitalization of small businesses. But if you have seen your wages reduced, or, perhaps, become nonexistent, then I will assume this offer, as a proactive way forward, will interest you.
In Conclusion: Revitalize our Small Businesses and True American Economic Nationalism and We Will be a Great Nation Again.
I have wrapped the story of my own business around current economic times. I have lived through some very painful hardships as a result of this decline in my own success. I had to understand after the shock of the changes in my own microcosm how and why this happened to me. Then, I discovered that it was happening to millions of businesses at the same time across the country. After years of earning and living in the top 1 percent, I found myself in a completely new category. I had to face the reality that I had to identify what went wrong and how I could change it. When I knew I was part of a much larger group, suddenly, I realized the solution. Business S.O.S.TM was born out of this new knowledge and truth.
We can turn all of this around if we broaden our reason for being entrepreneurs as a means to making money and more about how we fit into the new global reordering of power. When it is only about money, then clearly our economy cannot sustain itself. We need to have a greater and nobler set of goals so that we can assure our country’s success as well as our own.
The goal of Business S.O.S.TM is to correct this self-centeredness by means of honest collaboration through up-to-date technology. This garners instant connectivity, flattening the globe and gives rise to an era of activism, social consciousness, broader awareness, and a collective big thinking. Things need to change when they brake and the situation with our two dysfunctional economies and the global economy in general is one of breakage. There are vast opportunities to rewrite the rules. Business S.O.S.TM is a disruptive concept that gives hope, optimism, and empathy toward our small business colleagues. We need to combat apathy with more elevated goals, and not just the ruthless acquisition of money or value to shareholders. This moment has given rise to activist trends in order to make broad and swiping changes to the way things have been done within corporations. Businesses need a way to pay forward to society in order to shape the kind of society we want. One that is not just consumptive but productive and that is not wasteful but is sustainable.
No longer can I just place a product on the middle of an ad and hope consumers covet it as I did in the 1990’s. They have to like you. Liking requires way more than just building a product or service; it requires a connection between you and that customer. It is so important that an authentic overture is developed to the consumer you are targeting. I make it a part of all my client’s current campaigns.
Business S.O.S.TM is developed out of this new desire to pay forward and the need to be disruptive in an effort to make swiping changes at a faster pace than what was conceivable in the past. It is for the social good of our nation and is part of a new business model of integration through technology and the social networks that will allow small businesses the opportunities and the competitive edge of larger corporations. We must fix our ailing entrepreneurship economy so that we can bring back the American Dream not just for a select few but anyone who has the talent, innovation, work ethic and skill to lead others toward a better more sustainable future.
Notes
Introduction
1. Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (W.W. Norton, 2013).
Article
- Tyler Cowen, “What Export-Orientated Means,” The American Interest Magazine, May 2012. “The Lost Decade of the Middle Class,” Pew Research Center. August 22, 2012. Retrieved October 15, 2012 from http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/.
- “What is SBA’s definition of a small business concern?” United States Small Business Administration. Nd. Retrieved October 14, 2012 from http://www.sba.gov/content/what-sbas-definition-small-business-concern.
- “Statistics about business size.” United States Census Bureau, August 22, 2012. Retrieved October 15, 2012 from http://www.census.gov/econ/smallbus.html.
U.S. Small Business Administration (2009). “Frequently Asked Questions,” Retrieved from http://www.sba.gov/sites/default/files/sbfaq.pdf.
- The Bureau of Labor Statistics (2012), “Labor Force Statistics from the Current Population Survey (CPS) – July 2012,” Retrieved from http://www.bls.gov/cps/.
Bureau of Labor Statistics, Department of Labor. October 5, 2012. Retrieved October 14, 2012 from http://www.bls.gov/news.release/pdf/empsit.pdf
The US Census Bureau reports that, as of October 2012, the Unites States homes a population of 314,587,391 people. Bureau of Labor Statistics most recent release on employment of September 2012 reports that the United States has a civilian non-institutional population of 243,772,000 people, which includes all persons 16 years of age and older who reside in the fifty states + the District of Columbia who are not inmates of institutions or on active duty in the Armed Forces. Of these, 155,063,000 are considered part of the labor force while 88,710,000 are not. This gives us a 63.6 percent civilian labor force participation rate. Of our labor force, 142,974,000 are reported as employed with 12,088,000 as unemployed, giving us a 58.7 percent employment-to-population ratio and a 7.8 percent unemployment rate. Of the 142,974,000 people reported as employed, 8,613,000 persons are involuntary part-time workers due to economic reasons. If we readjust the calculations, we conclude that there are 21,701,000 unemployed or underemployed workers in the force giving us an un-/underemployment rate of 13.99 percent. Now, if we consider the marginally attached workers, which included discouraged workers, we end up with 24,218,000 as the figure of unemployed and underemployed individuals and an unemployment rate of 15.61 percent.
- “Everything to Play For,” The Economist, October 6, 2012. 15.
- U.S. FDIC (2012). Selections from the Dodd-Frank Wall Street Reform and Consumer Protection Act. Retrieved from http://www.fdic.gov/regulations/reform/dfa_selections.html.
Alexis Goldstein (2012). Comment Letter to the Financial Regulators Urging Them Towards a Strong Volcker Rule. Retrieved from http://alexisgo.com/book.html.
Frank Newport (2012). “Americans Anti-Big Business, Big Government,”
Retrieved from http://www.gallup.com/poll/152096/Americans-Anti-Big-Business-Big-Gov.aspx.
- Carne Ross, The Leaderless Revolution: How Ordinary People Will Take Power and Change Politics in the Twenty First Century (New York, NY: Blue Rider Press, 2011).
- Census Bureau, Bureau of Labor and Statistics, and the U.S. Small Business Administration (2012), Retrieved from http://www.sba.gov/sites/default/files/sbafq.pdf.
- Tyler Cowen, “What Export Orientated Means,” The American Interest Magazine, May 2012.
- Charles Murray, “The New American Divide,” Wall Street Journal, 01-21-12.
- Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: W.W. Norton & Company, 2012).
- Ibid.
- Adam Liptak (2008). “U.S. Prison Population Dwarfs that of Other Nations,” Retrieved from http//www.nytimes.com/2008/04/23/world/Americas/23ht-23prison.12253738.html.
- “We Just Decided To,” Newsroom. HBO. (2012).
- Summary of data reported by the Office of Advocacy including estimates based on data from the U.S. Department of Commerce and The Census Bureau (2009), and trends from the U.S. Department of Labor, Bureau of Labor Statistics, Business Employment Dynamics (BED).
- Summary of data collected and available from http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx.
- Christopher Chantrill, 2012 and 2011. Data compiled by author. Retrieved from http://www.usfederalbudget.us/federal_budget_detail_fy11bs12012n and http://www.usfederalbudget.us/federal_budget_detail_fy11bs12011n.
- United States Census. September 12, 2012. Retrieved October 16, 2012 from https://www.census.gov/hhes/www/poverty/about/overview/index.html.
Troy Oxford and Lauren Feeney, 2012. “The Triggers of Economic Inequality,” based on information from “Winner-Take-All Politics,” by J. Hacker and P. Pierson. Retrieved from http://billmoyers.com/content/the-triggers-of-economic-inequality/.
19. Summary of data reported by Catherine Misbranding and retrieved from http://visualizingeconomics.com/illustratedguide/#.UC1mmkTJIbI.