How Small Businesses Can Struggle in This Economy

Small business struggle in a strong economy for two simple reasons: talent and time. Not time in the sense of hours in the day, but burnout. Low employment numbers mean small businesses have to think about recruiting talent differently than in the past. And added to that, burnout is real and can make you far less productive than you want to be. Regardless of economic conditions, the rate of which small businesses close is remarkably consistent, and you can read on to see the signs to be aware of.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Let’s Start at the Beginning

To appreciate what’s going on today, we have to start at the beginning of this 10-year business cycle. In 2009, we were just beginning to emerge from the most disastrous economic crisis to hit the country since the Great Depression. As a result, small businesses were struggling, and there was a significant drop-off in small business creation. Some major stumbling blocks included access to capital, decreased profits, and a reduced ability to hire. In fact, it was the first time in a long time when small businesses were employing less than ½ of the total U.S. workforce.

That’s a nice history lesson, but it misses some important facts. Fewer businesses were started during the period between 2009-12. Given that the rate of businesses closing is typically constant, fast-forward 3-7 years after the recession and we’re left with a gap. So, there was a lag in the tightening of the labor market. Now, the gap has closed and the competition over workers has increased.

Health Care and the Affordable Care Act

So much has been written about the ACA or ObamaCare. But, the truth is we will never know its true impact because it never was fully implemented. From its inception, significant roadblocks and intentional sabotage makes any clear read impossible. What is true is that the cost of employer-sponsored health care has dramatically increased, peaking in 2017. Because of all the smokescreens and gaslighting from all the vested interests, we still don’t have a clear picture as to why. We only know that the cost of offering benefits has increased the cost of hiring new employees. Hopefully, HRA changes will help alleviate

Hopefully, HRA changes will help alleviate some pressure, but providing health care to our workers is still a major issue. On the campaign trail, several proposals are on the table. Whether or not they have a chance of seeing the light of day will depend heavily on the 2020 election.


Burnout is a very real and very constant reality that most small businesses struggle with at some point. But, is exiting the right solution? Perhaps for some, it is. But, we would challenge that perspective for all. Selling your business is an option. However, to do that, the business needs to be structured so it can function without the owner. If the owner is the business, then our options are limited. It requires us to stop thinking like we’re a mom-and-pop shop. Instead, we need to think as if we were a small corporation with systems, process, and structure. These entities can exist long after the owner decides to exit.

Possible Solutions to Help

Let’s look at three possible solutions that may help small businesses struggle in a strong economy.


If we can break out of our conventional thinking, there are several ways small businesses can be creative when offering packages to new hires. Yes, people are motived by money. But, they are motivated more by feeling valued.


When it comes to health care, there is no simple solution. Since conditions vary widely from state to state, the right solution for your business will require some research. The options to consider SHOP, group policies from a private provider, or adopt the HRA approach.


We are less likely to burn out if we have a clear exit strategy. We know what we want the business to be. In addition, we structure it so it can eventually run without us as owners. It’s easier to value a business like this. It’s easier to sell it. Most importantly, it easier to leave when you’re ready.

struggling paycheck to paycheck

How to Handle the Small Business Economy

Small businesses are subject to the whims of the economy. The relationship, however, isn’t always clear. The economy being on the rise doesn’t necessarily mean that small businesses feel the benefit. However, knowing what to do to prepare for an economic boom can keep your business afloat and above the competition.

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