Big Picture’s Small Problem

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If you operate a medium or smaller business, you might be feeling left behind.

Your business may be muddling along while the economy is racing ahead. At least, there’s all that news about how businesses are doing so much better. You’d think we are all on some Alpine climb, what with the constant references to how the economy is pulling itself up and getting its footing.

Just look at the stock markets. They’re rising. Even if you’re feeling down. Nasdaq has jumped 15 percent from a year ago.

And large companies? Well, the Business Roundtable just last week said its members – big-company CEOs – never felt better. In fact, business is so good that 52 percent of them expect to increase hiring soon. Good for them.

But you? Maybe not so much.

If you’re a small-business operator and you’ve looked at your charts lately, you probably don’t see a hockey stick. It’s all the more painful if you look out and see all those big businesses have gotten in lifeboats but you’re left behind, standing alone on the beach at Dunkirk.

Granted, I know this only from anecdotes. L.A. businesspeople who operate medium-size and smaller firms often report that, sure, things are better than a year ago and certainly better than two years ago. But truth be told, conditions are not good. Business has bounced back a little, but it’s as if the ball were deflated. Sometimes these people say, “Maybe it’s just us. …”

But wait. It’s not just you. And now we have evidence that these doldrums are not merely anecdotal or random.

Last week, the Discover Small Business Watch, which measures the confidence of business owners with less than five employees, put out a report that began this way: “If the overall economy is improving in 2011, small-business owners aren’t feeling it.”

It said that 54 percent of small-business operators believe the U.S. economy is getting worse, up from 41 percent in February and the highest since September.

“Our surveys have shown that the economic events of the recent past have hit small businesses hard, and many are still struggling to sustain an individual recovery of their own,” the director of Discover’s business credit card was quoted as saying.

Also last week, the Rasmussen Employment Index, which measures workers’ perceptions of the labor market, plummeted nine points in March to its lowest level since August.

Just 18 percent of workers said their firms were hiring, while 25 percent said their firms were laying off workers.

These are not rosy reports. And the condition of small businesses is particularly important to Los Angeles, which is not a Fortune 500 town but has an abundant collection of entrepreneurial startups, creative types, and various agents and brokers.

Oh, sure, if you operate a small business in some hot field, such as technology or energy, you may be doing fine. But if you’re in, say, apparel, residential real estate, manufacturing or the entertainment industry, chances are you’re in a life-or-death struggle.

(By the way, the S&P/Case-Shiller Home Price Index came out last week with a bleak report that showed home prices weakening in January. Ominously, the report said, “The feared double-dip recession may be materializing.”)

Yes, it’s great that big businesses generally are doing pretty well, the stock markets have rebounded and there’s an overall perception that the economy is pulling itself up.

But it’s also important to remember that this recovery is taking too long and it’s far too tepid; if this thing calls itself a recovery, it could be sued for false advertising.

And it’s reassuring to acknowledge that many businesses, particularly smaller ones, are still struggling mightily. And if you’re one of them, it’s good to remember that it’s not just you. You have company and plenty of it.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].

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