Reading what is directly spelled out in the Stimulus package is great. US News at the following link will tell you all about what is specifically offered in the Bill. But the more important questions is "What does it mean to Joe Average Small Business Owner?"
So let's take a look at some of the basic numbers in the small business world. It is estimated in an average year, nearly 1,000,000 small businesses will open. And even in a good year, 400,000 of them will close before their first anniversary. Additionally, another 400,000 will close within the following four years. How much wealth will be lost from all of this failure? And how much will this or any other "stimulus package" actually help these small businesses?
If you add it all up, according to that article from US News, there is all totaled $2.850 Billion in grants and loans that is being funneled to Small Businesses. It may sound like a lot when written out in the article above, but the truth of the matter it's a drop in the bucket - providing nealmost arly nothing of any real consequence to any business. Literally, it is only $2,850 for each of the businesses that is going to try to get started this year (not to mention the other tens of millions already opened that are struggling).
Now let's look at it simply in the context of dollars per employee and how much more concerned the Government is in helping the Big Boys of Industry not fail and how little they will actually do for you. It is estimated that 500,000 small businesses (that includes both start-up as mentioned above and existing businesses) will close their doors / go bankrupt this year. Even if they only have one employee for each business (which is a gross under estimate), this stimulus will provide a total of $5,700 per employee. Not much, if you ask me. Now compare that to the $15 Billion that the auto makers were guaranteed (in loans) with only about 250,000 direct employees. That is about $60,000 per employee. And I won't even go into Citibank or Bank of America.
The truth is that even though the numbers that are being thrown around in the bill look enormous to you and me, they will hardly make a dent in helping small business owners survive the recession - or end up on the other side of the recession with any real viability. This "Stimulus Bill" may push some money into the economy - but money doesn't equate to wealth in this sense - and certainly won't really make a difference.
Don't get me wrong, I'm by no means endorsing this package or any other package. In my opinion, they are a mistake. Recessions exist as a backlash of an overly aggressive growth market that became fat with excess. Part of what needs to happen is that businesses and industries must clean up house. Strong, well run businesses will survive - weak, poorly run businesses won't. And that is a healthy thing, even though it will be tough on nearly all of us while we transition. Any Government stimulus will artificially delay the "house cleaning" that must take place in order for the solid growth to occur again, as well as give false hope to hundreds of thousands of small business owners across America.
The Federal Government won't put this in the Stimulus Package. But the truth of the matter is that the only thing that is going to help small businesses survive and thrive during the tough months ahead is focusing on basic business principles and making sure you provide a product / service that customers want and/or need and do it for less than it costs you to produce it.
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