Small business owners more capable than those in control

May 26, 2009
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For years I thought that the people who managed big business were smarter and more capable than the people who ran small businesses. Considering Arthur Anderson, Enron, GM (Government Motors), Chrysler, Big Banks and the pirates on Wall Street I have had to rethink my conclusion. If a person makes more than a million dollars a year they must be capable. Then again, maybe not.

Imagine a small business owner making these mistakes.

The product should be something people want. If your product is developed to impress yourself and your buddies you may fail. More than half of American car buyers are women. They are not likely to be sitting around the country club over a beer reminiscing about high school drag races. Most car buyers are trying to find a solution to getting from here to there at a reasonable cost. Some need a 500-horsepower truck but most don't. What the auto industry has done is a build a product fitting their perception then they try to sell it. They should have read the market and made the product desired by the market.

You should not loan money to people who can't pay it back. How hard is that to understand? Here is the problem. Billions were made on Wall Street in this monstrous scam. If you live in the Hamptons and are anonymous and have no conscience, why not? In the long run this ruse was bound to fail. A small business owner would go to jail. On Wall Street you might lose your country club membership. Greed is good. Big is better if you feel that way.

Do not borrow money from people with names like Guido or Barack. If you borrow money from the mafia you know what to expect. Same goes for El Presidente. Doesn't this remind you of Hugo Chavez? Now a man with absolutely zero business experience is hiring, firing and picking product lines. It would be better to hire an executive that grew up in that dysfunctional auto industry. It would be best to bring in a dynamic outsider who knew business and understood costs, margins and stuff like that. Ford did that. That company has not had to sell out to D.C.

If you're going to rob people do it like Bonnie and Clyde, not Bernie Madhoff. Somehow it seems more honest to know you're a low life crook and act accordingly. Today's crooks think they're financial wizards. Robbing with a gun is bad. Robbing with trust may be worse.

When you buy a politician be aware that you have bought a bag of hot air. It almost seems that any group that needs to spend large amounts of money in Washington is tainted at the most fundamental level. If a vote on a bill is the right thing for America, why do you have to give them money so that they vote the way you want? The vote should be based on all of our well being.

When you look at how our political and industrial leaders have brought us to the brink of financial Armageddon you have to wonder what they were thinking. The fact is they are not smarter than we are. The average small business owner is more capable than the average politicians and industrial leaders. They make one-tenth the income and today create bigger profits. Small business is resilient and adaptable.

Here is the defining difference. In small business you eat what you kill. In big business there is the issue from the executives to the janitors about what I ought to have.

In small business you have what your efforts and abilities bring you. Big business has cannibalized their companies because they could not exist on what they earned. They took from the companies what they thought they ought to have and with the help of El Presidente Obama we are all going to support that unfortunate misconception.

Paul A. Hense, CPA, is president of Hense & Associates, a local accounting firm. He also is past chairman of the National Small Business Association and the Small Business Association of Michigan.

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