There Are Lessons For Mom & Pop Businesses In Wall Street’s Tumult
It’s no mystery how Lehman, Behr Stearns, Fannie Mae, Freddie Mac and now A.I.G. have ended up – referencing the old Smith Barney commercial – they didn’t earn it. Through manipulation and company executives’ hubris, those failed firms are now wrecking havoc on the world economy. But make no mistake this didn’t come out of left field – many people could see what was happening beginning in 2005.
Anyone else feel like we’re watching reruns of Enron’s Smartest Guys In The Room? This time they aren’t just jacking California but the world.
We’ll get through it, even if your grandchildren’s grandchildren will have to pay the cost. The Federal government sees the cascading effect of letting a disorderly breakup of these major financial players continue and have stepped in.
If somebody had told economists a year and a half ago what was about to befall Wall Street and then asked them to predict the economic impact, they almost certainly would have forecast a steeper downturn, with many more layoffs, than has occurred. Lehman could have taken steps to correct their problems months ago – they went out and consciously purchased more of the toxic junk they were already holding thinking they wouldn’t get burned.
The U.S. economy has now punished those who chose to bury their heads in the sand.
The lesson for mom & pop businesses is two-fold. First, Wall St. is not Main Street. We couldn’t leverage ourselves into such a predicament. Or could we? (See my post about Poka Dott last week.)
The lifeblood of the U.S. is the 22 million businesses with five or fewer employees. Commonly referred to as “mom & pop” businesses, together they produce more than $1 trillion in annual revenues.
Second, we as business owners have got to make a profit. The days of taking out a home equity loan to support a failed business model should be done. The days of starting a business because your husband/wife “needs something to do” are done. So too are the days of hiring your friends because you are comfortable with them. If you can’t fire them, you shouldn’t be hiring them. You have to make a profit.
The lessons are clear for independent businesses – don’t assume things will magically turn around. Sure the government swooped in and saved these giants but there’s nobody going to save you but you.
Do you have a mission to make people’s lives better by using your products or services rather than just a way to make a living?
Then get out there and compete! Walk your neighborhood and introduce yourself. Call your best customers. Don’t just sit there and stew about your 401K or mortgage or get into mindless chatter about lipstick, Britney’s comeback or how awful the hurricane was. You don’t have the luxury of a negative thought right now.
The ones to lead America now are you, the small business owners, the ones who don’t play games with other people’s money, who show up and work the long hours and who make a profit.
We need you to do better than ever. You have to earn it.
Don’t forget, you can always bring my positive sales tools to your next meeting, just come over and take a look at some of my clips.
1 Comment
September 17, 2008 at 8:53 am
Great article. Mom&Pop businesses are the lifeblood of the U.S. economy. Without these businesses the economy would collapse.