Weekly Small Business Thought — 1/9/2017
Each week, I share a short small business thought; a new idea, a big upcoming event, or a question to consider during the current week.
What does it mean to start a business in a strong economy?
The “Great Recession” constricted the American economy. Market uncertainty froze lending. Businesses could not access the capital needed to survive, leading to layoffs.
8.7 million jobs were shed from February 2008 to February 2010, and GDP contracted by 5.1%, making the Great Recession the worst since the Great Depression.
In fact, at one point during the Great Recession, more businesses in the U.S. were closing than opening.
Last week, I wrote a review of the latest monthly jobs report; the last of President Obama’s Administration. The contrast between the President Obama’s first monthly jobs report in February 2009 and the January 2017 report is striking.
8 years ago, the U.S. economy lost 598,000 jobs and the national unemployment rate was 7.6 percent.
The January 2017 report showed that 156,00 jobs were added to the U.S. Economy in December 2016 bringing the unemployment rate to 4.7 percent.
Beyond the jobs figures, wages have finally started to rise for employees, and — although the U.S. Fed raised rates in December 2016 — rates are still near historic lows.
This data may point to new opportunity for small businesses; both new businesses and businesses started during the economic recovery. Opportunities to raise prices, to provide more premium services, and/or to simply access the capital needed to start a businesses while rates are low.
Research firm, Customer Growth Partners, recently upgraded its sales growth forecast for the holiday season from 4.1% to 4.9%. However, e-commerce is the big winner here. The National Retail Federation will release their definitive report on Holiday spending this week.
The combination of wages rising, strong economic indicators, low interest rates, and a new U.S. Presidential Administration that figures to be business friendly should create a strong environment for small business in 2017.
Take a look at the National Retail Federation’s holiday report this week to see where and how consumers are spending to take full advantage of the stronger economy.
