If you’ve ever laid off an employee, you know it’s not an easy thing to do. It’s even harder when the employee is your dad or your daughter or your cousin Larry. Hard or not, it’s happening around the U.S., as family businesses slowly go the way of the buffalo. Numbers from the Bureau of Labor Statistics show that businesses with one to 19 employees, almost all of them family businesses, shed 757,000 jobs from second quarter 2007 through third quarter 2008. That’s half of all private-sector losses coming from a subsector with only 20 percent of all employees. And we imagine it’s only gotten worse since late ’08.
NFIB doesn’t care. Most people would say it’s a sad day when a family business goes under. Not the National Federation for Independent Business. The New York Times, which reported the story above, quoted NFIB chief economist Bill Dunkelberg saying the demise of family businesses is a good thing, because the economy is being “cleansed” of unneccessary products and services. Pretty heartless. We wondered why. So we did some research into the NFIB. Turns out the organization has a lot more corporate ties than they’d like people to know about.
Fear of banking. England’s Daily Telegraph raises an interesting issue: maybe one reason more small businesses aren’t getting loans is that they’re afraid to go talk to their banks. Apparently, people assume that a frank discussion will cause their banks to raise their charges.
You call that courtesy? Those English small-business owners have a reason to fear higher charges. USA Today reports that banks increasingly rely on customer charges to make a profit. In fact, were it not for overdraft fees, almost half of banks and credit unions wouldn’t have made money last year. Banks call it a “courtesy,” paying your bill if you overdraw your account. But they charge high fees for the service. And many of them resort to some iffy practices to make sure overdrafts happen as often as possible. They typically process big transactions first, which draws down your account faster and brings in more overdraft fees. And some banks post charges when a purchase is made instead of when it clears, which can also drive an account into the red and bring in more overdraft fees.