Business managers, especially small-business leaders, enter 2010 facing a plethora of problems.
Whether it is the uncertain economic climate, the possibility of reduced credit sources, new mandatory healthcare-benefits regulations or employee burnout, the outlook isn't good.
As one obstacle after another looms, it is clear that steering a company today is fraught with challenges.
The economy hasn't bounced back as much as everyone had hoped, and the solutions being offered - especially for small businesses - don't seem to address the problems.
In a survey of more than 600 small-business owners/presidents by this newsletter’s parent, Information Strategies, Inc. (ISI), 87% said their clients were still “on the fence as to the direction of the economy.”
In planning for 2010, 67% said they had two sets of scenarios - “bad” and “worse.”
The administration and Congress seem to think that more deficit spending will jump-start the economy. At some point, these initiatives will need to be paid for, and profit-making institutions are the only sources of additional income. Read: higher taxes.
The Wall Street Journal reports that banks, the primary source of loans for most businesses, face billions of dollars in refinancing in 2010. Weakened as they are, they will need to raise fees and interest rates to pay for their mistakes in large, leveraged corporate buyouts and in real-estate loans gone sour. In the recent ISI survey, 91% of 506 business owners/presidents said they expected their costs for loans and bank services to increase in 2010.
Whatever healthcare-reform bill comes out of Congress and signed by the president, corporate costs of providing healthcare benefits will increase, despite what supporters say.
Perhaps the biggest problem facing companies, especially small businesses, is employee burnout. In its survey, ISI reported that 71% of 576 respondents said staff morale was down, with 55% saying it was at the lowest point they had ever seen.
The only saving grace seems to be that when asked how they felt, 59% of these owner/presidents were confident that their companies would survive. Long-term, 47% were optimistic that their companies would eventually thrive.
In the meantime, it appears 2010 will be a period when small businesses will need to take some bad-tasting prescriptions in order to continue to provide the goods and services from this vital national economic sector.