White House Economic Advisor Paul Volcker said recently that in this country we’ve been far too dependent on consumer spending. This makes sense: Consumer spending accounted for 70 percent of the U.S. economy before the recession hit and, as we all know, you should never put all your eggs in 70 percent of a basket.
But this good advice is not great news for small businesses, many of which rely heavily on consumer spending. Worse, it’s unlikely consumer spending will ever be the force it once was. What’s a small business owner to do? Volcker suggested the action in years ahead will be in the fields of infrastructure repair and green innovation. And, more encouraging for small businesses, in exporting. Only 1 percent of the 27 million small businesses in the U.S. are involved in exporting now. And with economies in Asia and Europe recovering, this might be a good time to look into foreign trade. Where to start? Try the Small Business Association’s international trade site and the small business portal of the Export-Import Bank of the United States. There are also organizations like the Small Business Exporters Association and online starter courses such as the ones sponsored by the nonprofit group My Own Business.
Small businesses bullish on the future. People who start small firms tend to be upbeat. After all, you don’t launch a business with the expectation that you’ll fail — any more than you set out to be a famous Hollywood screenwriter and end up doing a blog. (It happens, of course, but as noted above, we’re talking expectations here, not reality.) So it’s not surprising that small business owners replying to a survey titled the “Guardian Life Index: What Matters Most to America’s Small Business Owners” said they’re confident their outfits will come out of the recession in good shape and poised for growth. How? Survey respondents say they plan to succeed by focusing on their customers and employees.
How to attract local business. Some politician once said all politics is local. While that’s not necessarily true for business, it’s certainly true that without our regular evening patronage, our corner pizzeria would be on some other corner. So how do you attract more neighborhood trade? The Wall Street Journal calls these the “three best ways” to draw the locals: Sponsor a contest, offer special deals in tandem with another local business, and form a local business alliance to mount publicity efforts. (And of course, if you own a pizzeria, offer a 10 percent discount to the bloggers around the corner. Never fails.)