Did you know that even during a good economy that only one in ten new small businesses ever make it past their first year in business in the U.S.? This is speaking of businesses that provide hard or durable goods. Small businesses that provide services have a slightly better track record, not much but still better. Now, in steps the American economy over the last four or five years that is progressively getting worse and not better.
One of the problems is the soaring prices of fuel. If you provide durable goods to the public, those goods arrive at your place of business, it costs gas money to get them there, so the higher the gas prices go, the more it costs for those durable goods. Now, you now have to charge the public more money for those goods. However, there is something else that is going to affect you. Unemployment rates are at 9 or 10%! A lot of people cannot afford to buy those goods. This impacts your business severely and you have to do something because there are bills and rent to be paid. You can’t just give it all away! What is a small business owner to do?
Even those that provide a service must charge more; fuel costs money so in turn they are charging you more to come to your home or place of business to perform their work but you or that company can’t afford the added cost. In turn that small business loses your business or must do the work at cost with no profit or overhead and now that small company must downsize to stay in business, they lay off half or more of their staff and this adds to the unemployment rate. It’s a never-ending vicious circle!
It is safe to say that over the past four or five years over 50% of most of the small businesses that were thriving before then have either went out of business or shut their doors. This is alarming and there just does not seem to be an end in sight.
Do you own a small business? Is it going to survive this economy?