How the Economy is Impacting Small Business | Ep 052

Kacie: Now, today we're going to break it down into specifically small businesses, how it impacts small businesses. And it's going to, you're going to stay frowning probably for a little bit at the beginning of this episode, but we will turn your front upside down because we have, I think some encouragement and some things that we can do to combat this.

The Business Project podcast 

John: business 

Kacie: can be complicated. We break it down to regular people like 

John: us can understand and find success. I'm John Crespo, accountant and consultants. I'm 

Kacie: Casey Bryant, marketer and event planner. If you run a business or want to run a business, 

John: welcome to the show. 

Kacie: Welcome everybody to another episode of the Business Project podcast.

We are so excited. To have you here, if you have not listened to last week's episode, please go and do that. Whether you pause this and go listen or listen after this, because these are very closely related. We were kind of Debbie Downers last episode. Bringing the truth, bringing the truth, but I think that it's really something that we need to be talking about openly so that we can talk about how to come together to create some solutions.

Yep. Truth hurts. It doesn't help if you just sweep it under the rug. You can't sweep 

John: it under the rug. Mm mm. Um, what is it called? Problems fester? Yeah. They don't 

Kacie: go away. They don't go away. Most of the time. Most of the time. And a lot of what we're talking about today, you can't hear in other places. Oh, 

John: we had problems finding information.

Kacie: Very hard to find information. Yeah. It's hidden in the deep, deep dark webs. 

John: Gotta dig. Mm hmm. I think this kind of stuff is more, you know, getting out. From behind the computer and actually going into your community to see the look and the feel and the energy of what's going on. That's how you're gonna really get some answers.

Kacie: Mm hmm. Yeah. Last week we talked about, if you missed it, we talked about the state of our economy. We talked about some things that we're causing. What we're feeling so heavy when it comes to you know supplies and kovat obviously and the cost of everything going up interest rates Debt we read some statistics from debt.

You have personal debt and how that affects businesses and So we kind of talked about the overall You know bigger picture of things now today. We're gonna break it down into Specifically small businesses how it impacts small businesses and it's gonna you're gonna stay frowning Probably for a little bit at the beginning of this episode but we will turn your frown upside down because we have I think some encouragement and some things that we can do to Combat this.

John: Yeah. Well, you know economies have cycles We have our good times, we have our bad times. When money's flowing, everybody's celebrating. Right? But when money's tight, we're not celebrating so much. Right? Especially small businesses because we're the ones, um, like directly, directly affected when the money stops flowing.

We're, like, immediately affected when the money stops flowing. So, there's reasons why the money stops flowing, but there's also solutions on how we can work together. To overcome that for when you know, the money starts flowing again 

Kacie: Yeah, and we know that not all of you guys as business owners are struggling I mean, there's some industries that are actually booming right now.

Yeah, and some businesses that you know have to We have to use every day to operate and so I know a lot of you guys are doing okay And you might have some things that are impacting your business like, you know, having a hard time finding good labor That's a big a big problem with a lot of businesses right now or the cost of some of your supplies going up So I think but I think that there are a lot of businesses out there that are like I don't know what you're talking about.

My business is better than ever Well, I, I'm sorry to say that there are businesses around you. I guarantee you there are a lot of businesses around you that are not feeling that way. Specifically restaurant, hospitality, anything that is a luxury, uh, event venues, 

John: discretionary. 

Kacie: Yes, those types of businesses are a little bit struggling right now.

Breweries, wineries. I know those businesses for the most part across the country are having a hard time. And so if you guys are doing great, that's awesome. We need your positivity. We need your encouragement right now is a time to link elbows with the businesses next to you and. You know, do some of the things that we're asking today so that we can all continue to support each other and Small businesses around the country can continue to thrive because it's such an important part of our economy for sure 

John: Yeah, let's get into some statistics.

Yes, let's do it. This is some stuff that Data data it comes to information. We got to provide some data. 

Kacie: And again, it was really hard I mean really hard to find good information. It is hidden But these are just general statistics for businesses. So 3. 2 million small businesses And this was in 2023, so recently.

32. 2 million. 

John: 32. 2 million small businesses. Yeah, 

Kacie: that's a lot of businesses. And 32 percent of those small businesses say that inflation is their biggest business challenge right now. Yeah. 32%. I see that. I know one of the things that falls quickly behind that is finding good employees. We hear that a lot.

Yep. Yes. There is a staff shortage. Employees that stay. And that actually do the 

John: work. Yeah. Yes. I think the, the, uh, the, the sentiment amongst employees, like getting good employees is like, how do you encourage someone to work hard, right? For a small business. When they could stay at home and get government money and not 

Kacie: do anything.

Or they can work for these big corporations and get all of these benefits and high pay and things. Right. Get paid double to go work at McDonald's. Yeah. Yeah. It's rough. Uh, so over 99 percent of the businesses across the U. S. are small businesses. Over 99%. That's a lot. That's a lot. So most businesses are small businesses Wow, which is what considered 500 employees or less 500 

John: employees or less.

Yeah. 

Kacie: Yeah Nearly half of all US employees are employed by a small business So half of the people in our community are working for a small business. Yep That's pretty cool Small businesses have added over 12. 9 million jobs in the last 25 years So we're getting into this so that we can make sure that, and you guys know this, but put numbers behind the impact that small businesses actually have in our communities.

John: This is why focusing on the small business community has to be important. Like our government, who loves to create policy on the economy, you know, should be paying some high attention. On the small business community, right? Not, not just how it affects large corporations, but how their decisions are affecting us, the small guys.

Because we're 99 percent of the businesses in this country. 50 percent of the employees work for small businesses. If we can't, if we can't make it, that's gonna, the country's not gonna survive. No. 

Kacie: And that was according to Forbes. We probably should tell them when we got our numbers. Yeah, it's a big part of our economy.

And so this is kind of where the troubles come in. This is mishtalk. com. Uh, talks about small businesses. And again, it's hard to find this information. Bankruptcy surge in 2023. And according to this, nearly 1500 small businesses filed for subchapter five bankruptcy this year through September 28th. And that's only just one type of bankruptcy.

And there are several types of bankruptcy. So I can imagine that number is a lot more than 1500. And it says that nearly as many as in the entire 2022. And this gives five reasons while bank, why bankruptcies are surging. The first one is rising interest rates. Which we talked about in the last podcast.

John: Crazy interest rate environment right now. 

Kacie: Yep. Surging wages. Again, it's really hard to compete with a big corporation that's bringing in all this money. And can afford to pay it. And some McDonald's are locally owned. So I shouldn't, they're locally owned franchises. And they have their own struggles. So I didn't mean to throw McDonald's under the bus, but I was using it as an example.

Yeah, I 

John: mean it's a great example because it's true. 

Kacie: Yes. Tighter bank credit is the third reason, having a hard time getting bank credit. Over leverage. That one, I see, I have personal people in my life that I see going into insane amount of debt. Yep. And we've talked about that in past podcasts too, how that's, you know, the trend now from all these little trendy.

Tick tockers as they tell you to get all these credit get all these credit cards stack 

John: them up Yeah, you fund your business with a credit card get into all 

Kacie: this debt 

John: because then you'll become a millionaire But they don't they don't tell you that you got to pay that stuff back 

Kacie: Or you have to have a plan in order to pay it back.

It's not just gonna magically show up And then the other one is work at home curtailing demand So a lot of people don't want to work from home. I can see that. Yeah. Yeah. We got, they got spoiled. Yeah. During 

John: COVID. You know, one thing I want to point out is when you were reading the statistics there is that, um, there's already more bankrupt or there's the same amount of bankruptcies now the year's not even over yet than all of last year.

So I'm just putting that into perspective is, is that, um, there's still. Time to go before the year's over. We still have a whole quarter left. Still have a whole quarter left and a lot can happen in that quarter. So the economy is going backwards. It's not going forwards. So these statistics are telling us that we're going to be suffering, right?

It's not going to get better. It's not going to get, I mean it's going to get worse before it gets better. Let's just say that. Yeah. Right. Um, and. You know, we, you, you played a video, a local in my city video, um, before, before this podcast. And when there was a, an interview with a restaurant owner that, um, said revenue.