OMB: Owner-Managed Business

January is about half over and the only thing that seems clear about this year is that it will be challenging. The jobs situation is still bleak, and as long as it remains so, the economy cannot really heal. Since our national economy is transitioning from a corporation-centered economy to something that we do not yet comprehend, it could remain difficult for some time.

The national recovery effort is not having the impact that our leaders expected. And some of it was obvious already: "shovel-ready" public works projects are projects that were probably already going to be built, regardless of whether we used federal funds, state funds, or local funds. The only difference is where the taxes to pay for the projects must be raised. Thus, most contractors had probably already hired the help they needed for those projects. Poof! Billions of dollars thrown down the drain.

The financial institutions haven't been lending like they previously were. I have to admit that I haven't been in the market for a loan, not even to replace my vehicle, but even people that have been looking for financing are saying that it isn't like it was a few years ago. Certain credit card companies are dramatically shrinking their loan base--either by cutting loose customers or by reducing the credit limits available to those customers--with the effect that outstanding consumer credit is dropping quickly.

In one sense, that is a good thing. Getting out of debt, not being under the thumb of the banker, is always a good thing. Even so, very few of us can purchase a home or a newer car without financing the purchase. The credit restriction will affect the purchase of big-ticket items for the near future.

And into that situation, we find that a number of us need to launch small, locally-owned businesses, and soon. Why? It could be that a laid off worker is about to run out of unemployment insurance benefits--and the extended benefits--but still has not been hired anywhere else. It could be that a student is about to graduate from high school or college, and is not able to find a job, nor to pay for college classes. It could be that a family's landlord is about to lose the property, and the only way for the family to fund the purchase is to add another "earnings engine".

Not that starting your own business will be easy. You could face zoning-related issues, space or other resource limitations, or the failure of your family to recognize that "at home" does not always mean "available". You could face increased pressure, as your bills continue to rise and you struggle to pull in enough funds to cover them.

Whatever the source, you can expect that this year will be challenging. Perhaps things will ease up later in the year, but until then, things will get worse before they get better.