Our sales our up for the year, despite a dismal June. That's my disclaimer so you don't think this post is all about me. I wanted to make an observation about small business failure. Right now, the usual small business exit strategy doesn't work due to the economy. Most small business owners with struggling businesses in normal times, would throw in the towel at a certain point. The failure rate is high, and it doesn't get easier over time (a frightening statistic).
Throwing in the towel would be especially attractive to many right now, especially with housing values on the decline and credit card companies applying the thumb screws. Nobody loans money or signs leases with small businesses, they loan money and sign leases with small business owners. So if your house has negative equity, throwing in the towel, aka bankruptcy, solves a couple of problems. That's what we saw at the beginning of the recession with many businesses falling like dominoes as owners went back to working for others. You don't see that as much any more. Why? Unemployment.
There is no quitting your interesting experiment in small business and going back to your day job, because there is no day job. Small business owners are now in it until the wheels fall off, until the doors are padlocked by the landlord, the credit cards don't work and the employees stop coming because you haven't paid them. The exit strategy has failed. It has met the enemy, an economy with a stratospheric unemployment rate. The new strategy, which includes most, if not all small business owners, involves rolling up the shirtsleeves and re-assessing what they're doing. I personally find that somewhat liberating. We often have a tyranny of choice in our society. This focuses small business owners like nothing else could. Americans are extremely strong and resilient once they know what needs a doin'.