Entrepreneurship

If you’ve read my column in the past, you know that I consider the only positive to accrue to the Main Street economy during the Lost Decade (2007-2016) is the unprecedented financial strengthening of America’s small business sector.

Make no mistake, the Lost Decade, created by three avoidable disasters – the Great Recession (2007-2009), the 2008 Financial Crisis, and Washington’s anti-business policies (2009-2016) – was devastating to this sector. Millions of small firms were wiped out when these three calamities converged to create the economic equivalent of a perfect storm.

But the small firms that survived, the ones that somehow weathered the insidious “New Normal” that defined that period, became stronger from their devotion to these two specific practices: 1) They learned how to operate leaner and more efficiently than they ever thought possible; 2) They deleveraged – got out of debt.

To support my analysis, consider the responses from a recent poll of my small business audience.

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In a recent column – “The Real Price of Free Information” – I encouraged all of us to become more discerning and skeptical consumers of the digital news and information being fire-hosed at us virtually every second of every day. So as a way of practicing, consider this headline: “Mount Everest climbers forced to retreat from summit goal.”

Sounds like they didn’t make it, right? But here’s what the copy revealed: The team actually summited late in the day, but, “before they could fully experience their accomplishment, darkness and weather made it prudent to set up camp on the leeward side of the mountain overnight, before re-summitting the next morning.”

This headline, while technically not wrong, was misleading. But full disclosure, I made up the entire Everest story, headline and all. However, you’ll see its usefulness when putting the following real headline in perspective with what actually happened. The following headline from a real Wall Street Journal article is a perfect example of why we must apply the discerning, skeptical reader discipline: “Confidence in U.S. economy retreats among small biz CEOs.”

It seems that content curation in the digital age requires headline writers to think: “Accuracy? Ethics? Whatever. My job is to make you click. If you don’t click, we don’t eat.” So, you and I are required to look under the hood of this headline that is referring to the results of a Vistage survey of small business owners, which reported that the December 2018 confidence response was 101.7, down from 106.3 in November.

Yes, technically this was a retreat. But I’ve been reporting on small business sentiment for over 20 years, including the Vistage report and the 45-year-old gold standard, NFIB’s Index of Small Business Optimism. The Index’s economist, Dr. Bill Dunkelburg, has reported its results every month on my radio program since 2000, as this indicator travelled from well over the almost five-decade average of approximately 100, to being stuck in the low 90s for almost the entire Obama administration.

Since December 2016, the NFIB Index has vacillated from a low of 103.0, to the Everest-summiting, rarified-air equivalent of 108.8 in August 2018. And yes, just like the Vistage report, the NFIB Index also dropped from 104.8 in November to 104.4 in December 2018. But put into proper historic and accurate perspective, a big bold headline of recent movement from both surveys should read: “Still a lot of happy business campers on Main Street.”

You’re going to continue to see headlines of small business sentiment that might sound more dour than optimistic. Just remember, the reality will likely not be that small businesses are retreating down the mountain, but rather that they’ve decamped to the leeward side of the summit to take a much-earned breather and reset for a second assault tomorrow.

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