Let's Stop Complaining About 'Uncertainty'
I was in Washington last week and met with two Congressmen who sit on the House Committee for Small Business. When I asked them each what they're hearing most when they speak to small businesses around the country I received the same answer from both: Uncertainty.
"Small businesses are uncertain about so many things today," said Rep. Mark Hanna (R-NY). "They're uncertain about taxes, government regulation, our national debt, health care reform. I hear this all the time."
He's right. I hear it too. From my clients. From my readers. From the people at events where I speak. It's one of the primary topics being discussed at this week's Reuters Washington Summit. The economy isn't growing, and the media explains that it's because so many business people are uncertain. And this sentiment isn't exclusive to small business. Big businesses, like Nissan and FedEx are using "uncertainty" to explain their own financial challenges. "Uncertainty" has defined the economy this election year.
I can relate. I'm very uncertain too. For example, I'm uncertain whether I can last the entire summer with my three teenage kids in the house without killing at least one of them. I'm uncertain about whether I should commit time to watching Game of Thrones because my tech guy says it's the best TV show he ever watched. (I'm uncertain on this because my tech guy also regularly attends the Comic-Con conferences.) As I write this, I'm kind of uncertain about whether the guy sitting next to me in seat 7B has bathed anytime within the past week. So yes, I'm uncertain about a lot of things.
And, of course, I'm uncertain about my business. And the economy. And the political environment. And world peace. And disease. And the weather. And why my Coke kind of tastes like my flight attendant's thumb. And whether an asteroid will hit the earth. And whether Peggy will return for another season on Mad Men. Like so many others, I use uncertainty as an excuse for why my business hasn't been growing. I blame our "uncertain" economy and nod my head in agreement when my colleagues and clients curse the world around them.
But wait just a second. Since when have things ever been certain? Since when do people know for sure what's going to happen in the future? At what point did smart, independent, risk-taking small business people suddenly start blaming all of their problems on uncertainty? Isn't uncertainty a historical part of running any business? A big part?
Let's say you were running your business anytime in the past 40 years or so. How certain were things in the early '60s? With the threat of nuclear war, the steel industry fixing prices, escalation in Vietnam, soldiers shooting at college students, politicians murdered, black people hosed in the streets, massive protests, the Carpenters music playing everywhere? Those were uncertain times. And did things really get better in the '70s, with high inflation, long gas lines, terrorism, a president who was forced to resign, Sonny & Cher? Were things any more certain under the reigns of Reagan, Bush, Clinton, and Bush? Exactly what was done with that cigar in the oval office anyway?
Of course things are never certain. There's never been an easy time to run a small business. Is this a surprise? For thousands of years business people, industrialists, and shopkeepers have operated with the risk of excessive government taxation, military conscription, plague, bad teeth, over-cooked mutton, and wars that killed our children and depleted our resources. We've suffered invasions, looting and rioting. We've seen interest rates and inflation skyrocket, stock markets collapse, and our currency lose its value almost overnight. Politicians and leaders make promises...and then change their minds a year later.
And yet we, as Americans, continue to complain about "uncertainty." This, at the same moment of history when a dictator has assumed the leadership of Russia (again), punishing those that speak out against his government; a socialist has been elected in France as neighboring countries teeter in the face of economic collapse from spending too much on social programs; civil wars have devastated Syria and Libya; and the world is entrusting the British, yes the British, to run this year's Olympic games. By comparison, our country looks downright stable.
Maybe the reason I hear so much about "uncertainty" is related to the people I'm hearing it from. Losing your job as a result of the recent recession can make anyone feel uncertain. And, like so many of those who find themselves running a small business for the first time to generate income, they're finding that it's a cold, hard world out here. Here's certainty: having a job with health benefits and a retirement plan plus a nice boss, a yummy choice of organic coffees in the break room, and "casual Fridays." Here's uncertainty: getting up at six in the morning, enduring abuse from the few customers you've managed to scrape together, banging your head trying to find that mysterious subcontractor who promised to deliver by today, begging for money owed you from work done three months ago, and tossing and turning all night wondering if that big project will finish on time (and if it doesn't where you're going to get the money to pay the suppliers you owe). Running a small business can be scary, risky, stressful, and, most of all, uncertain. Methinks there are many new entrepreneurs finding this out right now and they're the ones who are yelling the loudest.
I don't hear the word "uncertainty" from true blue entrepreneurs. You know who I'm talking about. Inc. reports on them every day. These are the ones who are getting financing, creating new technologies, making a killing on Wall Street, snapping up competitors who lose their mojo, buying used equipment for a song, or partnering with sketchy people in China or East Africa because there's money to be made. Are these people uncertain? Of course they are. But they love it! Because that's their thrill. That's how they make money. Business, all business, is a bet. A gamble. Because they are true business people, they understand the concept of risk and reward. The more uncertainty, the more reward for the right bet.
I don't hear the word "uncertainty" from the typical small business owner. The 20 million of us who are running tech firms, baking pizzas, changing oil, mowing lawns, buying high, selling low. I hear words like "slow," "terrible," "frustrating," and a host of other profanities for which my editors could lose their jobs if they allowed them to be displayed here.
There are plenty of reports of how corporations are sitting on a mountain of cash but unwilling to spend because of uncertain times. Actually, business investment has been up over the past few years. I talk to many business executives and uncertainty really has nothing to do with why they're not spending more. These guys are not spending this money because there's nothing to spend it on. The economy is not growing and neither are their customers. They're eking out profits by cutting costs and keeping employee numbers low. There's no need to stock up on inventory when demand is slow. They don't have to build new buildings when they have fewer employees. They don't need more equipment when they're able to produce all they need with the equipment they have. This is not uncertainty. It's choice. These guys are quite happy to take the risk. They get that nothing's certain. They understand that any investment they make may not pay off.
Will higher taxes bring on another recession? Will planned cuts in government spending do the same? Will our national debt bankrupt us? Will health care reform, in all or in part, have an impact on our economy? Will the Fed's money policies fuel inflation and higher interest rates? Will our dollar regain or lose strength? Will Rielle Hunter and John Edwards ever get back together again?
These are big questions. But they are not new questions. These are the same issues that businesses have been facing since Caesar. It's just that today there are no gladiator fights or orgies. Successful entrepreneurs understand this and thrive. The rest just complain.
GENE MARKS | Columnist | Owner, Marks Group
Gene Marks is a columnist, author, and small-business owner. He oversees the Marks Group, a 10-person technology consultancy to small and medium-size businesses. A certified public accountant, Marks has also worked in the entrepreneurial services arm of KPMG. He writes for The New York Times, Forbes, and The Huffington Post.