How Small Businesses Can Grow Through Economic Uncertainty

[music] You’re watching Business Trends Today exclusively on ASBN. Small businesses have proven time and time again that they are resilient. They’re continuing to hire, innovate, and serve their communities. But beneath that resilience, many owners are feeling the weight of rising costs and ongoing economic uncertainty. When business leaders stop asking, “Can we grow?” and start asking, “Should we wait?” it can slow hiring, delay investment, and ultimately impact the broader economy. So, joining us to help make sense of all of this and and what’s happening really in Main Street is Dan Varroney, who’s founder of Potomac Core, a strategic consulting firm that advises trade associations, policymakers, and business leaders. He’s also a best-selling author of this incredible book right here, Rethinking Economic Growth: How Small Businesses Can Grow the Economy Consistently. So, Dan, thank you so much for first and foremost for the book. It’s a phenomenal book. I highly recommend everybody gets their copy. We’re going to make it very easy for them to do that. There’s a link right below the video you’re watching. Get the book. You can thank me later. So, Dan, we hear a lot about inflation, interest rates, and uncertainty out there certainly every day. But but what are you seeing as the biggest challenge facing business owners today? You know, what with all that’s going on right now? Clearly, it’s uncertainty. But what I want you to understand from at least from my perspective, from everything I’m seeing and hearing from small business is what I call the resilience factor. It’s been absolutely remarkable, right? They have, you know, kept their focus close to the customer. They’re great at it. They’ve made wise investment decisions. And most and more important, Uh, they uh, have taken full advantage of the big beautiful bill, right? The qualified business income has given them more certainty. Uh, they’ve made investments on the basis of the 100% expensing provision in plants and equipment. Yeah. And what’s been impressive to me, uh, actually very impressive, is that since February, that small businesses, businesses under 50 people, have added over 300,000 jobs through June. Yeah. Wow, that’s great. Seven out of 10 jobs added have come from small business. And historically, it’s only two out of three. Yeah. What I can tell you is this, that small businesses have been uh, wise in the choices that they’ve made. Uh, they’re making investments in technology. They’re improving productivity and they’re hiring. Yeah, it’s great. It really is. We’re often asked here at uh, ASBN is from from our listeners, they’ll either text message or through social media, whatever, for those people, maybe it’s a baby boomer that has retired at 59 and a half or 60, but has a whole lot of runway left. They don’t want to completely retire, but maybe they want to start a new career, buy a franchise, or what have you. From your perspective, is now a good time to start a business? This is a great time to start a business. Uh, and it’s a great time to start a business because all of the technology that’s available, it’s the right time to make the capital investment because of the big beautiful bill, right? Yeah. If you can use 100% expensing for plants and equipment, you can buy the technology, uh, you’ll be able to maintain and increase your cash flow with it. So, I think it’s a great time. I think it’s a great time because of the technology. I think it’s a great time because of the regulatory changes. Uh, the president has said that for every new regulation created, that 10 need to go away. This is the time to get in. If you’re looking to get in to a small business, now is the time. Yeah, yeah. I I agree. I agree. You’ve said that uncertainty is a hidden cost for businesses. What do you mean by that and how does uncertainty affect the decision that owners make every day? So, uncertainty is like a sand in the gears. It slows things down, right? So, we always want to know what we don’t know. How long will the war in Iran go? Will there be any ongoing disruption in supply chains? Will I continue to have a hard time uh finding workers? What will interest rates be? What is the new Federal Reserve chair Kevin Warsh going to do? And all of those things can serve as sand in the gears. Um and and that’s what I I call uncertainty. Those are the things that uncertainty causes. Yeah, for sure. Um one of your key messages is that every hiring decision is really a confidence decision. Can you explain what you mean by that? Sure. It Every hiring you decision that you make nowadays, it you are showing that the uncertainty is really certainty and that you are confident in your business and the forward direction of the economy. That’s what that means. Yeah, yeah, for sure. Um small businesses and and medium-sized business create about 2/3 of the new private sector jobs, as you mentioned earlier. What happens to the broader economy when Main Street becomes hesitant to hire or invest? Oh, it clearly slows hiring. But let me tell you something. What I’ve noticed over the last year and a half, it’s not only the big businesses that have made the big bet, the big investment in technology and and trying to get more productivity, it’s small businesses as well. Yeah. And what everybody is not seeing right now, and sometimes we all have a tendency to get too caught in the headlines, right? Is that with the investment in this technology, we’re investing in productivity. And when we invest in productivity, we invest in growth. I believe that over the next 6 to 12 months, we are going to see a productivity boom and a growth boom that will follow that, and it will be led by small businesses. Mhm. Yeah, I I I could see that. Many business owners are asking whether now is the right time to grow or to wait for more certainty to come into the economy. What advice would you give leaders trying to make those decisions? You know, if if past is prologue, you have to you have to know when you’re waiting too long. Uh and and here’s what I would say to you. There’s a lot of capital in the marketplace. You’ve got the ability uh to get loans while still a bit expensive at reasonable rates. Now is the time to get in. Do not wait too long. You will miss what could have been a good bet. Yeah. Yeah, for sure. As you look ahead, what economic signals would tell you that small businesses are ready to move from caution back to growth? Keep looking at the private sector jobs numbers. That’s exactly what what I’m looking at. So, uh when you look at the the jobs numbers, right? So, there’s the numbers that come out of the Bureau of Labor Statistics. Clearly, I look at those, but 2 days before the private sector jobs numbers come out of uh ADP. And I look at those every month. And again, I have been reassured since February that the economic signal, especially in small business, is strong, and that the economy 6 and 12 months from now will be strong as a result. Yeah. Yeah. Well, we’re looking forward to those those times again, right? When certainty is is back and uh we can we can move ahead. Right now, it’s a little bit uh uncertain, but I think you’re right. Small business owners are very resilient. They find a way. They pivot. They got to do They do what they got to do, and they move forward. And uh that’s what we love about them here at ASBN. So, Dan Varroney, founder of Potomac Core and author of Rethinking Economic Growth, we’re showing [music] the book right now on the screen. Thanks so much for sharing your insights today with our business leaders out there. I know that they’ll get a [music] lot out of it. So, thank you so much. Pleasure to be with you. Thanks.