[Hidden-tech] Business stimulus for HT members ?

[Robert Heller]

At Tue, 15 Dec 2009 06:57:11 -0500 Shel Horowitz <shel at frugalfun.com> wrote:

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> At 11:43 AM -0500 12/14/09, Rich wrote:
> >With all the discussion of business stimulus I thought I would pass 
> >interesting items on as they pass my desk.
> >I am specifically interested to know what HT members are interested in.
> >
> >As with most of you, my business is not the type banks see any value in,
> >no inventory, just a bunch of (smart) people.
> >And that is exactly the point, I get asked by economic development planners, 
> >and the only answer I can give so far, is that part of their jobs is 
> >to help us
> >determine how the state/fed/etc can help small business.
> >
> >What I have found is that all they do is keep defining small 
> >business as bigger,
> >so it's easier for them to work the overhead.
> >
> >BTW, I don't think there is anyone in HT who is what is defined as 
> >'small business'
> >we are now defined as micro-business - small is $5-100Mill
> >
> >So a question to all of you - who is interested in discussing  how to get
> >all these agencies spending our money to put in back into HT type businesses ?
> 
> Great post, Rich. But let me play devil's advocate...
> 
> 
> Yes, we want to be counted as businesses, and yes, the trend to 
> exclude us has gotten worse.
> 
> But as a taxpayer, I want to see stimulus funds going to job 
> creation, and going to businesses that are hitting a financial wall 
> without help. Many of us H-T folk have little or no inventory, create 
> few if any jobs, and have fairly minimal capital needs (upgrade the 
> computer every few years). If we could tap into the pool of stimulus 
> money for making our homes more energy-efficient, great. But the 
> business stimulus pool should really go to those who are creating 
> jobs. That of course could easily be companies well below 5MM, maybe 
> even as low as 250K--which is still well above my class.
> 
> I suspect my situation is fairly typical in our circle: I've been in 
> business 28 years and have only created one part-time job (a steady 
> independent contractor, to be accurate). I have no debt other than my 
> home mortgage, have a few thousand dollars worth of inventory 
> (books), and mostly create what wealth I create on the basis of my 
> brainpower and writing/marketing skills. I submit that people in my 
> situation need reasonably priced creative marketing, not a bailout.

Here is a thought: If your business fails, that *increases* the
joblessness (i.e. you are now unemployed), so while providing *some*
support for 'micro' business does not 'create' [new] jobs, it does keep
people employed [at existing jobs].  It is also not that these 'micro'
businesses are going to suck up large amounts of the available money. 
Also: 'micro' businesses make use of the goods and services offered by
'small' (and 'large') businesses.  Merely 'giving' a 'small' business
the cash to hire someone is somewhat useless, unless the new hire has
something 'productive' to do, and the 'something productive' could in
fact be selling a good or service to a 'micro' business.  If the
'micro' business fails, the new hire has less to do and if enough
'micro' businesses fail, then there is not much point in hiring the new
hire in the first place, no matter how much cash is tossed at the
'small' business.  The point of the stimulus is to stimulate business,
not to create meaningless jobs (eg relabling a 'welfare' check as a
'pay' check does not really stimulate business), it only really works
if the new jobs are actual jobs -- eg workers doing *productive* work. 
To some extent, this productive work would only exist if there are
(healthy) micro businesses around to make use of the goods or services
provided by the new hire.

Wondering: would 'reasonably priced creative marketing' be a service
offered by a 'small' business?  I think it might make some sense to
'grease' the wheel at both ends.  Or at least make sure the grease is
applied where it can do the most good.

I think what has been happening over the past 20 years is that there
has been a shift in how various sorts of services are being delivered. 
Not so much that there are 'new' services, just in how various
'traditional' services are being delivered in the 'digital' age.  In
the 'old' days things like 'advertising' was done by (then) relatively
good sized businesses (newspapers, magazines, etc.).  Now lots of this
'market' is taken up by web desigers (which are 'micro' businesses).
Many 'small' newspapers and magazines have been replaced by web-based
services (web sites, blogs, portals, etc.), all managed by 'micro'
businesses.  Many small *print* newspapers are now 'micro' businesses,
given the reality of modern digital printing services (many of which
are 'small' businesses that *depend* on a cluster of 'micro' businesses
as a customer base for their existence).

Another thought: given the transition to a more 'digital' existance it
might be that there will be fewer 'traditional' type jobs as more of
the workforce transitions to 'micro' business people, so expecting
'small' businesses to be hiring more people might be unrealistic on
some level.  What might be happening in the near future would be that
'small' businesses will be sub-contracting with 'micro' businesses for
various services traditionally provided by in-house employees.  In this
case, it might make sense to make sure that the 'micro' businesses are
healthy.  (I don't know just what that means in terms of stimulus
spending, but it probably means some re-thinking at the SBA.)

Note: all of the above rambling, although mostly in terms of 'print'
media, also applies to all other media: many musicians are 'micro'
businesses, mixing and producing their own CDs and ditto for filmmakers.
It is no longer the case that producing a musicial recording or a movie
is a massively capital intensive process.  CD and DVD duplication is
just as much as 'small' business that depends on many 'micro' businesses
as is the case of digital printing services.

-- 
Robert Heller             -- 978-544-6933
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