War adds to challenges small-business owners face
By Jim Hopkins
USA Today
The weak economy and Iraq war are giving the nation's 5.8 million small-business owners a new set of challenges.
Small-business optimism fell to its lowest level in nearly 10 years, says the National Federation of Independent Business trade group.
"War jitters have hit small business," says the NFIB, which has 600,000 members.
For some businesses, revenue is down, financing is scarce and more demands are being put on key people. But that may be nothing new for the experienced entrepreneur.
"The life of the entrepreneur is a crisis pretty much from the get-go," says Peter Winicov of the University of Pennsylvania's Wharton School.
Amid war, challenges include:
• Sudden market shifts. Entrepreneurs have been whipsawed in recent years by the economic boom and bust.
Greg Reber, the CEO of AsTech Consulting, a computer network security company in a San Francisco suburb, started his company in 1997, when tech spending was soaring. Then tech crashed amid corporate cutbacks and the Sept. 11 attacks that helped drive the economy deeper into recession. AsTech's revenue fell to $3.9 million from $4.8 million in 2001.
Reber, 40, says the Iraq war could help AsTech sell more services to protect businesses against computer attacks. But to do so, he and his management team must push AsTech forward — despite fewer resources. In the past year, the company has cut its payroll to 25 employees from 35.
Last week, he and three other senior managers debated how to jump-start work begun by a sales manager lost to the reserve call-up. Under federal law, AsTech must offer the manager his job back when he returns — even though no one knows how long he'll be gone.
In the Cleveland area, Yolanda Lamar-Wilder, 42, also is struggling with a changed market. Like Reber, she started her 3-year-old employment agency when the economy was strong. She knew life as an entrepreneur would have ups and downs.
But was she prepared for war? "Are you crazy? Absolutely not," she said.
Now she fears the federal government, a big source of business for agencies such as Veterans Administration hospitals, will cut back on hiring as it spends more on the Iraq war.
• Worried employees. Productivity skidded at the Chanhassen Fitness Center near Minneapolis the day after the start of bombing in Baghdad, owner Darryl Rozelle says.
Rozelle, 37, had beefed up security with video surveillance cameras. Still, many of his 20 workers worried about terrorist attacks, distracting them from work — and pushing him into the role of employee counselor.
Only 14 percent of small companies, those with fewer than 500 workers, have formal employee-assistance programs, vs. 71 percent of big companies, says Mercer Human Resource Consulting.
That means owners of small firms, who are wearing many hats, must also become chief hand-holders in a crisis. "People look to you as the owner to be the role model," says Joseph Weintraub, a management professor at Babson College.
Rozelle sought to comfort employees by admitting that he, too, was nervous. "I was very open about that," he says.
