A real head-scratcher. First the good news: small businesses are weathering the recession just fine and are adding new employees to their rolls. Now the bad news: small businesses have hit the skids and are actually shedding workers at a record pace. Confused? Well, join the club.
Two recent reports on small business hiring came back with diametrically opposed numbers. The SurePayroll Scorecard, an index of 20,000 small businesses, found that small business hiring increased .3 percent in January. Defending his data, SurePayroll CEO Michael Alter says that most of the layoffs are happening at large companies. He concedes that some small businesses are trimming payrolls, but says on average small businesses are creating more jobs than they are eliminating, mostly because they have a rare opportunity to snap up better quality workers at lower pay.
Of course, there are two sides to every story. The National Federation of Independent Business (NFIB) surveyed 800 small business owners and found an average decline of 0.86 workers per firm in December 2008, the largest monthly drop on record. “This data reaffirms that the nation’s economic crisis is crippling the small business sector of our economy,” says NFIB’s executive vice president Dan Danner.
Personally, we’re not sure who to believe. Our heart says SurePayroll, but our head is with NFIB all the way.
Dealing with deadbeat customers. There are lots of great things about running a small business, like being your own boss. And then there are some not so great things, like customers who don’t pay. Unfortunately, there seems to be more and more of them recently. What’s worse, according to this AP article, is that small-business owners can’t write off their bad debts. It’s a classic Catch-22: you never received the income, so you can’t deduct it, even though you did all the work. Sadly, Uncle Sam ain’t on your side when it comes to unpaid debts. Of course, you could always try hiring some muscle, but that might get you into some legal trouble. Collection agencies are a viable option, but don’t expect to get anywhere near what you’re owed. Fact it, deadbeat customers are the price all business owners have to pay. Make it a small price by choosing your clients wisely.
Just say yes? We know times are tough, but do you really need drugs to get you through? GNC, the global retailer of vitamins and specialty supplements, thinks you do. The company is now offering a 25% discount to start a GNC franchise. The catch: you have to be “displaced retailer” who’s been victimized by the recession.