The New Money Hoarders
The recession created a new type of money hoarders: small business owners. After seeing sales disappear, profits turning into losses, customers taking months to pay invoices, and banks refusing to lend money, small business owners changed their business habits. Saving more and hoarding the cash are the new norms. Some business owners are postponing growth and holding to the cash they were able to save through layoffs and expense cutting; while others are growing in a very calculated, very "cheap" way.
In a recent survey done by Discover Small Business Watch via WSJ, 40% of small business owners said that they will decrease business development and marketing activities in the next 6 months. Only 29% said they will increase, and 27% said they will keep it the same.
Experts and business owners alike say that this is a trend that will stay for the foreseeable future. The insecurity of the economic future is making everyone very cautious. Having a stash of cash for rainy day and not depending on banks and investors is a choice that more and more business owners are making. This is a great business practice. But when done in large numbers and at huge reduction rates, it triggers an equally big consequence: slow or no growth, which, in turn, leads to a slower job growth. And, since small businesses are the ones providing the most jobs for our economy, the ripple effect is the a slow economic growth or, even worse, stagnation.
As a small business owner, are you hoarding your cash or investing it in growing your business? I would love to hear back from you. Please leave your answer in the comment box.
Posted by Terra3.0 at 5/20/2011 2:25 AM 
Categories: Small Business, Entrepreneurship, Economy
Tags: Entrepreneurs Small Business
Categories: Small Business, Entrepreneurship, Economy
Tags: Entrepreneurs Small Business
Comments