Up and Running:

Health care, loans, SBA, job creation … have you noticed that the public discussion on all of these business-related topics is very far off base? Doesn’t it seem like the talking heads choose sides first, then recite talking points? And that the result is no real communication or discourse, because it’s all predetermined. Tell me what the pundit said and I’ll tell you which side he’s on; which uniform he wears.

Funny, everybody in government is in favor of small business. Words and phrases like “job creation” get used so much they’re diluted of all meaning.

Meanwhile, back in the real world, you and I are getting into the office early with a large cup of coffee every day, answering phone calls, following up on projects, and while these issues affect us in the long term, we have too much short term–and too much business-specific work–to allow us time to even look into it.

So I was browsing NYTimes.com online Sunday when I caught Robb Mandelbaum’s piece called Obama Talks Up Small Business, Again on his You’re the Boss blog. It seems like a decent piece of journalism, summing up the latest small-business talk from the White House. What struck me about it, though, was not the content but how much I find myself agreeing with this comment, from someone who uses only his first name (Doug) and says he’s a small-business owner. He said:

• This is not a Democrat vs. Republican issue. I am WEARY of the fighting–neither party shows it cares about anything but winning and staying in power (or regaining it.).
• As soon as a person brings up Pelosi or Reid or Obama or Limbaugh or Beck or Cheney–that person LOSES the argument by showing they are not an independent thinker but a follower of the hamster wheel of politics that keeps spinning, keeps getting you worked up emotionally, but never gets things done.
• Give American small-business owners the freedom to be entrepreneurs and they will supply America with innovation, jobs and new tax revenue.

I agree.

(Photo credit: Marynchenko Oleksandr/Shutterstock)

The discussion about health care and small business is really bugging me. First my bias, declared now so I don’t end up like all those others who just recite talking points supporting their “team” in politics: I’m firmly behind President Obama on health care.

(An aside: politics ought not to be a team sport. Every politician ought to decide on each issue based on what’s best for the country. But that’s impossibly utopian, I know.)

What’s bugging me, aside from all the obvious politically motivated hooray-for-our-side blathering from both sides, is the people claiming one health-care policy is good or bad for job creation or small business. Everybody, it seems, wants to speak for small business, but what they say is just claiming that whatever it is their team is saying is supposedly good or bad for small business. They’re using talking points. They’re playing for their team.

Here’s a simple truth: Businesses start or don’t start regardless of the government’s health-care policies. People start businesses because they want to, because they believe it’s good for them or for some similar motive. They don’t decide to do it–or not to do it–because of health care.

And more truth: Health-care costs don’t kill companies. People are not hired or fired because of higher or lower health-care costs. Companies that work, companies that succeed, will manage the health-care costs. Companies that fail are just looking for something to blame.

That’s my opinion.

I’m very happy to see our local (Eugene, Ore.) newspaper (The Register-Guard) leading today with this story by Diane Dietz about a local company getting $40 million in stimulus grants.

To you and me, this means “hey, it could happen to you.” Or so it seems to me.

Cascade Sierra Solutions in nearby Coburg, Ore., specializes in technical solutions to increase fuel efficiency in trucks. These are things like special add-ons to reduce wind drag, in one program. The latest grant is to install power pedestals at truck stops so truckers can plug into electric power without having to run their engines.

Cascade picked up $17 million in an earlier grant, and $22.2 million last month. It has about a dozen employees locally, but its programs are supposed to add about 1,700 jobs worldwide through greater fuel efficiency.

I’d like to think this is happening all over the country. It’s creating jobs, helping the economy and helping the clean-energy movement (or maybe just less dirty). But for today, here’s one example close to my home.

I love it: facts, information, surveys and information sources. You could have read here Monday, posted by me, how venture capitalist investment was up a bit in the second quarter of this year. And you can read here today, also posted by me, how venture capital investment dropped 51 percent in the second quarter.

Contradictory? Yes. Venture Source said $5.27 billion on 595 deals. But Bloomberg cites a PriceWaterhouseCoopers and National Venture Capital Association survey saying $3.67 billion on 612 deals.

Both sources seem to agree, however, that things were slightly up from an even-worse first quarter, although way down from last year.

And the moral of the story? There’s an old saying: “There are three kinds of lies:  lies, damn lies and statistics.” In 30 years of business planning, every year I trust actual sales and entrepreneurs knowing the market more than market statistics and surveys.

If you’re working your startup right now, even if you’re going for VC investment, statistics mean next to nothing. What matters is your plan, your team, your market and how well you communicate that to investors.

(image: indecision, by sporadicity on Flickr)

We’re sort of back to normal at Palo Alto Software now, after the big push to create our own sort of stimulus package for our state last week.

I posted about this here last week. The idea was that we decided to do something to help our state with its unemployment problem–in Oregon we have the second highest unemployment rate in the country–so for one day we gave away our premier Business Plan Pro software to anybody in Oregon who wanted it enough to go to one of 84 locations and pick up a download card.

The Eugene, Ore., Register Guard, the daily newspaper in our town, has the story.

Recession or not, the Silicon Valley Insider’s chart of the day shows Broadband Thriving Despite Economic Collapse:

I enjoy the chart of the day; it’s almost always interesting and usually informative. I really like a good business chart as a way to see a lot of information quickly.

My thanks to Steve King and Carolyn Ockels of Emergent Research for this slide show of their small business trends predictions for this year. I’m a regular reader of Steve’s SmallBizLabs blog. This collection is class food for thought.

Here’s some good news from the Wall Street Journal’s Independent Street blog: SBA Loan Programs Getting Back on Track:

“It’s finally happening. Efforts to get money to capital-strapped small businesses are beginning to work, as banks have returned to making loans backed by the federal government, says Karen Gordon Mills, the new Small Business Administration head.”

I do think I’m feeling an end to the worst of it, the world beginning to come back. I get it in our web traffic and sales flow at Palo Alto Software, and talking to friends who also run businesses. Things are still down, to be sure, but at least they’re not getting worse.

The WSJ post, by Raymund Flandez, adds some real numbers, too:

More than 10,000 Recovery Act loans have been approved, which represents about $3 billion in credit supporting small businesses, she said in her testimony at a Senate hearing Wednesday. The hearing was about the small business provisions of the American Recovery and Reinvestment Act, which was enacted in February.

Since then, more than half of the $730 million in Recovery Act funding has been put to use to make it easier for small business owners to borrow. It’s doing this mainly by reducing fees as well as increasing the guarantee that the SBA provides lenders in case of loan defaults. Weekly loan volume in the SBA’s two most popular lending programs is up 25 percent to $217 million since March 16, when the funds were made available, compared to the $171 million approved in the weeks before mid-March.

So we still have high unemployment, house values in chaos, foreclosures, investors forced to retreat because of lower net worth . . . but at least it begins to feel like things are turning up.

I guess this isn’t really news, because it’s pretty much what everybody expected. But still: The ADP National Employment report came out again today. The part that interests me most, the small business portion, shows yet another 284,000 jobs lost last month in the small-business portion of the economy–businesses with fewer than 50 employees.

That’s the worst yet. The number was 270,000 for February, and 232,000 the month before that.

How bad is it? I downloaded historical data to produce this a chart of small-business job growth and loss over the last 24 months:

You can click to get a larger view of that. The hard-to-read vertical axis shows job loss or gain in thousands, with a high of 78,000 jobs gained in November of 2007, and a low of 284,000 jobs lost last month.

Joel Prakken, chairman of macroeconomic advisors, said:

“Despite some recent indications that stock prices, consumer spending and housing activity may be bottoming out, employment, which usually trails overall economic activity, is likely to remain very weak for at least several more months.”

Here’s a good news angle on more bad news: In his post last Friday, Steve King of Small Business Labs suggests that we may be hitting bottom.

The February jobs numbers were not good, with non-farm employment falling 651,000 jobs and the unemployment rate increasing to 8.1percent. And according to the ADP Employment Report, small businesses cut 251,000 of those jobs.

But the good news is job losses do not appear to be accelerating. The U.S. economy lost 681,000 jobs in December and 655,000 in January.

March will likely be another bad month, but the economy should see some benefits from the stimulus package beginning in the second quarter. Modest, middle-class tax cuts will start and government hiring should go up due to federal hiring increases and state and local hiring stabilizing due to stimulus money.

King based that on the ADP Employment Report, which I’ve been following on this blog for the past few months as it went up in September and then fell every month since.

On the other hand–and good news seems to come with an “other hand” these days–ADP reports another 262,000 jobs lost last month in small business, and that’s compared to 175,000 lost the month before. But–these things are rarely that simple–both of those figures were better than the 281,000 jobs lost in December.

I think we’re all tired of all the successively bad news. What a relief to see the stock market finally go up for a couple of days, although I hope it doesn’t get jinxed and go down today.

Interesting post by Ryan Healy on Employee Evolution, A Bad Economy Is the Perfect Time to Start Over. Things were exciting during the barest startup days, he says, then got too easy after his company got financed.

But once you get funded, the headaches just begin, and it starts to feel like a “real job.” It’s easy to get comfortable, to forget about all the hard work you put in before there was cash in the bank. And strangely enough, you end up wishing you could go back to the beginning or sell your company and start a new one.

Ryan is one of the co-founders of Brazen Careerist, a Generation Y-oriented career site that, I gather from this post, has had its ups and downs. I’m aware of that blog because my daughter Megan posts on it occasionally, too.

Apparently Ryan’s too-much-success problem went away very quickly when the crash hit.

Then, before we even realized what was happening, the market crashed, investors pulled back, and we didn’t have salaries anymore. The whole company had gotten too comfortable; we weren’t prepared to handle the downturn.

But oddly enough, three months later, things are going really well. We made a decision to switch up our business model and bring in revenue any way possible. Every dollar we make is treated like gold, we’ve managed to cut our burn rate by nearly 50 percent without losing any productivity, and we’ve realized just how many ways there are to make money without begging someone for a multimillion-dollar investment.

He comes to a well-written and well-thought-out conclusion, which I’m happy to pass on. It seems particularly appropriate to the world of startups during tough economic times:

I’ve learned a lot from this whole experience, both personally and professionally. Difficult situations are the best learning opportunities; when things are good it’s very difficult to see how you can improve. But when times are tough, you have the opportunity to make difficult, life-altering decisions. Great businesses and great leaders embrace difficult situations and thrive when times are tough.

Well said.

Examples are around if you look for them. Even with all the economic indicators looking bad, businesses that do something people need done still work.

Brent Bower of The New York Times had a nice piece along those lines over the weekend. He called it Business Opportunities Abound, Even in Bad Times. He features three specific small businesses that are growing right now. One focuses on medical discounts for low-income people, one on data security, and one is looking to invest in new business in a down market.

And it isn’t just needs driving business, either. There’s also some obvious growth in cool technology. Things that change the game. Specifically, another piece of news this weekend is a new $35 million investment in Twitter. That’s along with a series of commentaries and analyses on how Twitter can, someday, eventually, make money.

What Twitter has, in the meantime, is a huge growth in buzz and users. And it’s free. So it makes no money now, but its investors figure it will make money eventually.