Small business ownership in America is down by 60% since 2008.

The engine that drives job creation is broken. There are many reasons for this happening, and perhaps it is the combination of them rather than an individual reason for this drop. But it is fact that there are far fewer small businesses in the market.

Today, I want to talk about what you are facing as a small business owner and what we can do to make things better for you.

The first thing to be aware of is that all of the economic data you read about is misleading. It is manufactured by the government and for a purpose. Let’s look at inflation. Everyone knows that the official rate of inflation is purposefully set lower than reality for many reasons, chiefly among them, in order to avoid COLA raises for entitlement costs. The actual rate of inflation has virtually erased the entire value of a dollar over the last few decades. As the government extracts your wealth through inflation, you will find it harder to maintain sustainable cash flow for your business. We all do.

Many business owners turn to credit. Credit cards, loans, mortgages. The kiss of death for a small business. If you are in a tight squeeze for cash flow, and you turn to credit, you are essentially tightening the squeeze even more. The interest you pay to your credit lender comes out of your margin. It may seem like a way to get by, but in reality you are making things worse. Banks are not your friend as a small business owner. Not-your-friend. You are far better off finding ways to cut your costs, than by adding interest payments to your monthly bills. Here is a chart from the government showing the growth of debt against the GDP growth. In a normally functioning economic environment, debt never pulls away from GDP like that, unless fueled by a coordinated effort by the government and the banking community. This chart should scare you as it visually shows an unsustainable bubble that will with certainly burst. For those living off of debt, when the bubble bursts, regulations tighten and lending standards will likely shut you out of access to debt.

And here we see a trend, clearly showing that someone hit the brakes for commercial lending:

 

Surviving this period in history is a huge challenge for a small business owner. Manetane can help you to power your small business widening the gap between top line revenue and your monthly expenses. How are your finances, and cash-flow? We are a call away.