The Venture Edge

According to a Wells Fargo/Gallup poll published today, more than one in three -- 36% -- of U.S. small business owners reported that they are moderately or very worried that they will go out of business in 2012. Not only that, but 32% reported that they are moderately or very worried that they will be unable to pay their employees in 2012. When asked what they think is the most important problem facing small business owners like them, the top-three responses were: Complying with government regulations (22%), consumer confidence (15%), and lack of consumer demand (12%).  

Let me first say that I do not work for mobile payment startup Square, nor do I own any of their stock or have any other financial interest in the company. That said, I think Square is on the leading edge of a revolution in how small businesses accept credit card payments.

Today Inc. magazine published some interesting survey data on the current state of small business today versus 2009 -- the depths of the U.S. financial crisis -- and, occasionally, prior years. In some cases the trend is positive, while in others it is decidedly negative. What's your opinion? 

It seems like every time I turn on the news, some commentator or talking head is claiming that the U.S. economy won't get better until the government brings certainty into the financial or regulatory or tax or whatever [insert favorite excuse here] situation.

If you've been reading this blog for more than a month or two, you've probably noticed that I'm a big fan of contests for entrepreneurs. Not only do I think they're fun, but they can be a good source of cash -- and what entrepreneur can't use a little extra cash? Entrepreneur magazine recently ran a contest roundup, including a UPS Store Facebook contest (deadline = August 31, 2011), 2011 Avaya Small Business Innovators contest (deadline = August 30, 2011), Staples Youth Social Entrepreneur contest (deadline = September 9, 2011), and Cleantech Open Global Ideas competition ( deadline = September 30, 2011). 

I recently read an article in USA Today: Hackers target small-company sites. According to the article, since early June, a team of hackers has been using an automated attack to inject malicious code on some 20,000 to 30,000 sites, many of them small businesses that rely on the Internet to reach customers. That was 20 to 30 THOUSAND websites hacked by just this one gang in about a month's time. Why are small-business websites targeted in particular? Because few small businesses devote the resources necessary to secure their websites against hacker attacks. Specifically, a survey by Panda Security found that of the small businesses surveyed: 

I am sitting here in sunny, but very cold, Hilton Head, SC and thinking about small businesses.  Not just because I'm here to speak at a the USASBE conference on small business and entrepreneurship, but also because I just finished driving around the island with a colleague and had the opportunity to talk to some small business owners.  The primary economic driver in Hilton Head is tourism, so lots of retail and food services. Like many other small business people, these entrepreneurs have really taken advantage of the Internet to promote what they have to offer because it's where we all look for information and because relative to other forms of promotion, it's inexpensive.  Makes sense because with just an iPhone and a car, we were able to find the best that Hilton Head has to offer.  However, some people still believe that direct mail (what we all refer to affectionately as junk mail) is the most effective marketing channel--and Paul Vogel, the U.S. Postal Service's chief marketing person, is one of those people.

Have you been feeling more optimistic about the prospects for your business lately?  Well, according to the  Wells Fargo/Gallup Small Business Index -- a measure of small-business owners' perceptions of their operating environments -- the expectations of small business owners for the next 12 months are the best they have been since July 2008. In fact, the index surged 24 points -- from -28 in July 2010 when the index was last measured, to -4 in November 2010. While a long way from the index's peak of 114 at the end of 2006, the trend is definitely moving in the right direction.

Listening to the political pundits, you might think that big business is the instrument of evil, responsible for all society’s ills. If we could only regulate, tax, and generally punish big business for the harm it has inflicted on everyone, all would be well. Those same feelings aren’t transferred to small businesses. No, small businesses, bless their little hearts, are virtuous, positive reflections of American ingenuity and hard work, and they create all the jobs worth counting. If only it were that simple. 

Today -- Sunday, October 3, 2010 -- marks the official end of the Troubled Asset Relief Program, better known as TARP. As you may recall, TARP was signed into law by President George W. Bush on October 3, 2008, at the height of the U.S. financial meltdown triggered by the subprime mortgage crisis. The original plan was to authorize up to $700 billion in spending to buy up (surprise, surprise) "troubled" assets, which included those bad mortgages and other questionable financial instruments. As it turned out, the government ended up not spending anywhere near $700 billion and in July of this year, the Dodd-Frank Act put a cap of $475 billion on TARP.