The American Dream is different for every person. To some it’s the opportunity to own their own home; to others it’s to work hard, save and live their golden years in comfort; to others it’s the opportunity to start a business and use it to build security and wealth for themselves and their families. So how is the American Dream working for you. For many today the American Dream is still very much alive to others its dead or at least on life support. Just consider the following:
Home ownership-One of the cornerstones of the American Dream
- 11 million homeowners are upside down on their mortgage and have little hope on the horizon that their situation will change.
- The value of the average American home has decreased 23.7% since the peak of May 2007 according to Zillow.
- Foreclosures activity will increase this year as RealtyTrac expects 1 million homes to be repossessed by banks versus 804,000 in 2011.
- Although 1 million jobs have been created in the last six months we’ve only replaced 43% of the 8.3 jobs that were lost in the Great Recession
- Civilian labor participation is 63.6% which is the lowest since 1981. This means that in addition to high unemployment many people who can work are choosing not to for many reasons including: Baby Boomers retiring rather than continuing to work at unsatisfying jobs, second earners who find little incentive to rejoining the work force, student who stay in college because of limited employment opportunities and people on public assistance programs (food stamps, Medicare etc) who can’t afford to give up the benefits they receive if they become employed.
- Although the Bureau of Labor Statistics’ unemployment rate is moving down towards 8% much of the improvement is created by workers who are still unemployed but aren’t counted anymore. Up to 500,000 workers have run out of benefits and have given up on looking for work so they are no longer considered “unemployed” by the Bureau of Labor statistics. If we added all people who are actually unemployed with people who are working part-time but who want full time work the number would be 16-20%. Adding people who have accepted jobs that pay less than the ones they lost about 1 in 4 Americans have been impacted by the New Economy.
- The United States now owes more than it produces. Our national debt is $15.5 trillion and our GDP is $15 trillion. Unfortunately there is no plan in place to address this issue and probably won’t be addressed until after the November elections. Given how the two parties have behaved in the past there is little evidence to support that a viable long term solution will be worked out any time soon.
- Taxes are needed to run government programs and reduce the debt. However only 50% of Americans pay taxes. This means that the half who does pay taxes must carry the full burden.
- Export sales are slumping. After a two good years of selling American products to a global market exports are softening due to economic problems in Europe and a deceleration in economic growth in India and China. With this decline in global demand our ability to grow our export business is limited.
The American Spirit-We as Americans have always faced adversity with optimism and a belief in our collective ability to surmount any challenge. This is part of our DNA. Two Gallop statistics suggest that our spirit is still strong but may be wavering a little.
- 53% describe themselves a s thriving (This is the silver lining and reason for optimism)but 44% say they are struggling (This means close to half of Americans have been impacted by the New Economy)
- Last year 65% of those polled by Gallop said they made enough to live comfortably but that figure dropped to 60% this year. That’s a trend that is going in the wrong direction.
So what’s the solution for resurrecting the American Dream?
I’ll give you a clue. It won’t come from Washington, it won’t have government strings attached to it and it won’t happen without innovation, courage and hard work.
The simple and unavoidable truth is that job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend — and consumer spending drives about 70% of the economy. Economic growth is the driver of the American Dream.
This means that the road to recovery and restoration of the American Dream must be paved with an entrepreneurial spirit and the growth of small businesses! Why small businesses and not corporate giants?
- Large corporations tend to be slow to adapt in a changing marketplace (Sears, Black Berry, Kodak, and Boarders Etc).
- Large corporations are often driven by quarterly results and investors looking for short term profits.
- Many corporate CEOs are charged with maintaining the status quo rather than igniting the passion that originally drove the business to success.
- Many of our current economic problems can be traced to corporate leaders who were corrupted by power and greed (AIG, MF Global etc)
Although current data from Intuit and ADP shows small businesses are adding jobs at a faster rate than larger companies, many experts still project the end of 2013 before small business employment reaches where it was in 2007. This of course is dependent on the global economy remaining relatively stable during that period of time.
What has to happen to accelerate small business growth?
According to a recent survey by the National Federation of Independent Business (here):
“The two principal impediments to current small-business growth are business uncertainty and weak sales… The single most important indicator that would renew small-business owner confidence in business conditions is increased sales in their businesses.”
So how do small businesses increase sales and gain confidence?
Based on the research I’ve done for my book “Leadership in the New Economy”, there are two ways business leaders look at these challenges.
- The first and easiest way is to say it’s a demand issue. These businesses feel that business will improve when the economy picks up. Unfortunately, those who are waiting for demand to “knock on their door “are struggling (and will continue to do so IMHO).
- The second way is to look at these challenges as marketing and business operations issues. I’ve found that businesses who are thriving now are effectively market themselves and adding greater value for their customers.
If you own a small business don’t wait for the economy to carry you. Have the courage and conviction in your own business to market yourself more effectively and find ways to create more value for your customers. Create a customer experience that not only creates customer satisfaction but inspires loyalty as well. Improve your business operations by engaging your employees in ways that taps into their knowledge and passion for your business.
Leadership matters more now than any time in our nation’s history. I’m not just talking about the leaders we elect I’m talking about the leaders who will lead the small business revolution that will restore the American Dream for generations to come. To borrow form Shakespeare, the question is no longer “to be or not to be” the question for American small business owners is, “To become a leader or be forgotten.”
If you’re interested in learning how to increase sales and profits in your marketplace get FREE access to the Growth Positioning Survey by clicking here. You’ll get a strategic snapshot of your business that maps out what you need to do to grow your business.