Thoughts on the Stimulus Package

I am being asked to comment in a number of media outlets about the impact of
the President’s stimulus program on small businesses. Today I did an interview
for MSN Business. Later this week I will be talking to La Opinion. Here are some
of the typical questions I have been receiving and the answers I am giving. I
have done this in outline form so that you can read this very quickly. I’d love
to get some feedback from our readers.

    How important is small business to the U.S. economy?

  • Small businesses drive this economy
  • Employ about half of the nation’s 144 million private sector workers
  • Account for 60 to 80 percent of new private sector jobs
  • Generate more than $6 trillion in annual revenue
  • Account for more than half of the country’s GDP

    What do small businesses possess that larger enterprises lack?

  • Personal passion: Personally invested rather than Wall Street dollars.
  • Customer-centric: Deep understanding of customer needs and opportunities.
  • Agility: Adapt quickly to changing market conditions and new business practices.
  • Experimentation: NOT afraid to improvise and accept failure as a path to success.
  • Limited resources: Adept at accomplishing more with less with little waste.
  • Collaboration: Rely on social networks, affiliates, alliances and information sharing.

    What are the economic challenges for small businesses today?

  • Crushing debt due to asset devaluation
  • Lost 4 million jobs in the last year and more than half are small business jobs
  • A significant drop in sales and productivity in every industry except Washington
  • Lack of access to capital or affordable funding
  • TARP participating banks will likely not participate limiting the ability to fund loans
  • Wickedly fierce competition and price erosion

    How might small business’s benefit from the President’s stimulus plan?

  • Obama earmarked $15 billion of the $789 billion stimulus package for small business
  • $730 mil to reduce small business lending fees
  • Increase SBA loans to 90%
  • Attempting to open-up secondary market credit

    What are some of the problems with the plan?

  • Incorporates a HIKE in taxes for all households and businesses earning more than $250,000
  • Higher dividend taxes
  • Limits on itemized deductions
  • Small businesses will likely have to shoulder a more responsibility for worker health care.
  • SBA was planning to guarantee $20 billion in loans yet currently on-track for less than $10 billion!
  • The US government is not in-touch with the needs of small businesses – they are spending billions to save 250,000 auto-maker jobs while already 4 million small business jobs have been lost!


While I cannot place the complete blame for this conundrum at the feet of this
new administration I believe the outgrowth of this stimulus plan is like taking
capital and revenue from the mouth of America’s small business owners and
feeding it to the big National Banks, Wall Street financers and government
bureaucrats. This theory enraptures Wall Street and alienates Main Street. Don’t
expect help from the government. Small business leaders are on-their-own. That’s
good for those willing to roll-up their sleeves. This is how our country became
great – on that backs of small business leaders!
We all have to answer the question: Do we have a fighting chance or just a
chance to fight? I believe the former.
Recommendations for small businesses:

    Business attraction is more critical than ever:

  • Become a bigger fish in a smaller pond by shrinking your audience.
  • Create standards and systems to leverage efficiency and accommodate growth.
  • Be willing to destroy and rebuild your business or re-invent yourself especially NOW!
  • Innovate or die! It’s time to launch your most creative products, services and marketing.
  • Take advantage of all the great talent on the street.
  • This is the time to enter into collaborative alliances, affiliate relationships and joint ventures to consolidate costs and spread risk.
  • Localize or globalize! There is no center ground today.
  • Invest wisely. This is the time to buy – learn how to identify devalued assets.


U.S. Department of Commerce, Small Business Administration, Intuit Future of
Small Business Report, Institute for the Future, Huffington Post,

Mark Deo

Posted in Managing Change, Uncategorized.

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