Small businesses struggle

In this economy, the hardest hit (besides the obvious millions of jobless) are the small business owners. Although everybody is struggling but the plight of the small business is much more, since they don’t have that much of a financial security when things fall through and since this economy has battered communities and people across the country, they have to work even harder to attract more people into their store to compete against the big box retailers.

With the increase in marketing to attract customers, the small business are being squeezed by whatever small profit they are making by spending more money to chase a few new customers. Although the government says that it is doing enough to help the small business, but until the economy improves no amount of money will be able to attract customers. Since their overhead is much greater than big box retailers since they may own few products line and the economies of scale are not just there, they have to rely on word of mouth, free internet marketing or free giveaways to fuel their business. And also with this new health care law stating they have to buy insurance or pay penalty, I believe that most of them will opt for paying penalty since it will be much cheaper than buying health care for their employees because of the fact that it is cheaper to get group insurance when you have hundreds of employees then less than 20 so it is much cheaper to not give their employees insurance. Some small businesses have shuttered their business since the cost of doing is more than the expense of maintaining it. When the demand picks up then there will be an uptake in hiring by small businesses and not sooner.