Reply by Lee A. Jesberger

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Posted on So how are we dealing with the new economy?

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Lee A. Jesberger

6855 posts in 3976 days

#1 posted 11-05-2008 05:08 PM

Hi guys;

I get emails from professional woodworkers on a regular basis, asking for advice on how to survive in these economic conditions. Some are giving up after thirty plus years, which is a very hard thing for anyone to do.
The emotional stress this creates is overwhelming, as it not only removes them from something they love and often is the only thing they know, it implants the feeling of failure.

Unfortunately I am not a business whiz so I really don’t have any answers to give them. More often than not, it’s a failure not so much on their parts, but a failure of the leaders of this country who make some of the dumbest decisions possible. There is an obvious lack of common sense in the decisions made, and no apparent conscience regarding the outcome it has on the average person.

For example, when they decided to double the minimum credit card payment, they pretty much signed a death warrant for many families. In an economic climate that was already very difficult, they added the final straw to the burden. People already in a tough financial spot, were thrown to the wolves. This is not to say that frivolous spending, or spending beyond your means is a good financial plan, but the fact remains the timing of such a move was horrible.

When the cost of living is going up in every area possible, and people are stretched to the limit, they decided to add to the load. How creative! How anyone could view this as a good move is beyond me. This single act closed many businesses, since their customer base no longer had the disposable income they once did.

It’s scary to think these people are supposed to be intelligent, and capable of making decisions based on the good of the country.

Consider President Bush’s comments when being interviewed at the Olympic Games just a few months ago. When questioned whether it was a good time to make comments criticizing China’s Humanitarian Policies, considering America’s problems, his response was, “First off, America has no problems”. HELLO, are you paying attention, or are you so far removed from the citizens you represent, that you really don’t know.

It’s not a matter of the business owners suddenly forgetting how to run a business, it’s a matter of the effects caused by changes made by our elected officials, which in turn changes the ability of being able to run a business.

Two months ago large cabinet shop near me had a two year backlog of work in the commercial sector, in addition to a healthy mix of high end custom work for residences. They were demanding overtime, (politely), from their workers in an attempt to keep up with the workload. Now, just two months later, they’re laying off their people. They didn’t “forget” how they got so successful, they simply had the rug pulled out from under them. Orders were being canceled faster than they were coming in.

Now they are caught in a position of having grown to meet demand, which means incurring a very large overhead. Much of this overhead is required to operate a business within the law. Now the income is gone, but the overhead remains. They have to decide if they should continue maintaining this overhead, which permits them to continue being in business, but eats away at their capital, or give up. If they stick it out, but the economy doesn’t revive quickly enough, they’ll be bankrupted. Or they could close up shop and save what capital they have. Great choice. And this is after at least twenty years of being in business, and having a nationally recognized name.

When General Motors stock is at it’s lowest point since 1951, how can a small business owner expect to survive. We don’t have the financial expertise, or the business management teams, or any of the other tools these large companies have at their disposal.

Unfortunately, as the Three Stooges used to say, we’re all “victims of circumstance”.

As my friend Tom Angle pointed out maybe the incoming President can revive the economy, but it will take some time to see any results coming from even the best plans and efforts.

Well, thanks for letting me vent!


-- by Lee A. Jesberger

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