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How Bad Times Are Good Times For Small Business

Mark Deo shows what to do with all those lemons

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Bankruptcies are the highest they’ve been since 2001, a million people have lost their jobs, and small businesses got the stimulus package shaft. And that’s the good news.

It’s all good news, says Mark Deo, executive director of The Small Business Advisory Network and author of The Rules of Attraction: Fourteen Practical Rules to Help Get the Right Clients, Talent and Resources to Come to You!

Mark Deo
Mark Deo

Deo caught up with WebProNews during promotional rounds for his new book and explained how now is the time for small businesses to evolve or die. What seem like troubled times for small businesses may actually carry some golden opportunities, buried way down under a heap of yick.

Deo says that although small businesses generate over $6 trillion of annual revenue, constituting over half of the nation’s gross domestic product, just under two percent of the $789 billion stimulus package—about $16 billion—is specifically earmarked for small business. (Deo includes businesses with $50 million valuations as small businesses.)

The Troubled Assets Relief Program (TARP) hasn’t been of much use to small businesses either. “TARP was supposed to be used to move money into the hands of small business owners,” said Deo. “But banks have held on to that money and not made it available.”

Until this week, anyway, as the US Small Business Administration announces the availability of 30,000 interest-free loans of up to $35,000 from TARP banks. While that might be a start, a little lube for seized-up credit market, it costs more than that just to send your kid to college.

Deo’s overriding point is that small businesses are not going to be able to rely on the government to pull them through the current financial crisis. “There are 30 million small businesses in the country, but the population is very fragmented.” This leaves small businesses, as a group, somewhat disorganized.

“They really don’t have lobbyists to push their initiatives through, and our economy is suffering because small businesses don’t have the resources they need. All the money is in the hands of these very large companies who are very wasteful, self-centered and bureaucratic.”

Deo stopped short of calling those big companies—energy, oil, telecoms included—evil. “They’re just not spending money wisely.” And yet these big companies are the biggest beneficiaries of government aid.

“There is some good news,” he says. “There are some small businesses that have not been operating effectively in this economy, and a number are folding. There were more bankruptcies in the last quarter than in every previous quarter since 2001.”

That’s good news?

Deo says it is. It’s a survival of the fittest thing. “Weaker businesses are pushed to the side, leaving strong small businesses and market leaders to snap up extra market share.” 

The other good news also doesn’t sound like good news: Big companies are laying people off. “About a million people are on the street now,” he said. “Some of them are real smart and some are going to become entrepreneurs.”

Perhaps they’ll start a business specializing in helping small businesses locate stimulus money?

Well that, or, as Deo settles into a short narrative preview (the full story is available in his book—see, opportunity everywhere after all, eh?), they can do like a downsized teacher client of his, who now runs a multimillion-dollar financial consulting firm for teachers only. Focusing locally and specializing can help a small business owner become “a bigger fish in a smaller pond.”

“And that’s what my book is about,” he added.

Or instead of starting their own businesses, the rest of that newly available talent will be looking for work. “Small businesses can scarf up some of those really smart players. A lot of Fortune 500 employees are going to work for small businesses next. I’ve had several clients who’ve been fortunate enough to acquire some A-player talent.”

One might call that the Making Lemonade Out of Lemons philosophy.
 

How Bad Times Are Good Times For Small Business
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  • http://www.controldatainc.com Collection

    Great artical thanks for posting. Interesting enough we have noticed in the last year or so that the type of people applying for open positions in our company have been from over qualified applicants. As a small business we would love to have one of those fortune 500 salesman apply for a position.

  • http://www.hattoss.com Accredited Online Universities

    Very informative article. Time for small business to accelerate.

  • http://money.softbath.net/stock softbath

    still a long way to recover from the financial crisis

  • http://www.producedbydeuce.com Bob

    Yes. These are all true statements.. Instead of everyone saying woe is me, woe is me about this whole financial debacle … We need to just put the past behind us and pull forward.. Not to ignore the unfortunate from the current escapades, but for us to simple quit our griping about the money and just make new solutions.. Trust me, I’ve watched the stock fall and the sales decrease from last year.. I’ve also gotten the line: “Well I’m sure I can find this cheaper somewhere else because people are hurting for money and willing to do more work for less!” I sadly had to let that potential sale go… That is the very attitude that is messing up our economy!
    Focus on the solution and not the problem.. Simple as that.. I think in the next few years to come we will see some really interesting stuff from the private sector and maybe let the new small businesses carry us out . Afterall, isn’t that what capitalism is all about?

  • http://www.lightbulbsrus.com dave light

    I believe this to be true. Everywhere I look most people that I know are working for small business or the goverment. I knnow very little people who work for large companies anymore.

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    That’s the spirit! If you can see opportunity where others see only misery, you win.

  • http://www.chickencoopplan.net chicken coop plans

    A positive view out of a bad situation. He’s very optimistic person. I agree with him, a real smart person have the ability to stand on his/her own in order to survive. Great opportunities will knock on their door, that’s for sure!

  • http://www.sidtech.biz Sidtech

    Hard times are the precursors to greater things. Only a few brave men have the courage to take them head on and emerge stronger. Our history has time and again shown this and I am sure many of us would be fighting their inner demons and market forces to start their own business or find a new challenging job- basically do something that is positive.
    And that, will be the beginning of a more secure tomorrow…

    Manish Pahuja

  • http://www.audio-depot.com Ken Udell

    Now is a time of incredible opportunity for small business. I have both a retail brick and mortar store and an online store selling pro audio electronics and accessories. In spite of predictions that electronics stores will be one of the hardest hit segments of the retail industry, these past six months have been more profitable than ever before!

    I saw an article that said that something like 82% of the CEOs of big corporations believe (correctly) that recessionary times are the best times to acquire competitors and suppliers, but in practice fewer than 24% actually do it.

    Small businesses like mine can take those risks more easily. And to think that seven months ago I was about to close my store because I saw hard times ahead… instead I bought out an ailing distributor’s inventory and biz went through the roof!

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    This is a nice blog about business strategies and tips and tricks for some small business man,s who start our business with a similar . i think this is very helpful for them.check my blog too its all about the business releted like this blog .i hope u learned much more .

  • http://www.pornreviews.com/ Guest

    Yup, It is time for small business to grow. Nice post

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