Small business and government

In a recent interview, I was asked whether small businesses will be hurt by the federal tax bill’s elimination of direct aid to ailing cities, and why many communities are crying foul.

My first reaction was, “What does this have to do with my marketplace of business owners?” Then I decided there is some impact.

Small businesses fall into two categories: those which pursue growth by selling to private customers, and those which pursue money by obtaining funding from private sources or government grants.

For those that pursue customers to grow their businesses, the direct impact of grant dollars drying up is minimal. Perhaps some of their customers will not purchase as much as if they were relying on grants, but the small business owner who stays adept at reducing the pain or increasing the opportunity of his customers is seldom impacted by government cuts.

For the few small businesses whose main customer or funding source is a governmental agency, the impact will be larger. I hope such firms don’t have all their sales eggs in a single government agency or program. Just as in serving commercial customers, it is critical to build broad and deep relationships within one’s governmental customer so as not be reliant on a single buyer or program that may leave, disappear or grow fickle.

Probably the bigger impact of cuts in local aid to cities is the negative contribution to the psyche of the business owner. Every day, he or she must take more risks, make a bigger payroll and decide to keep trying. For those with less confidence and more ambivalence, any bad news, including government cuts, provides one more reason not to try, grow or compete.

As the external distractions multiply and small business owners allow the general economic malaise to infect their resolve, the outcomes cannot be constructive.

My advice is to focus on your best and highest use, and spend all your energy on finding, keeping and growing customers. Even if your small business is wholly dependent on a government or tax grant to survive, my advice still stands.

Delight those you serve, and often your funding will remain, while other suppliers see theirs go away. Andrew Birol is president of Birol Growth Consulting, a Solon-based firm that helps grow businesses by growing their best and highest uses. Reach him at (440) 349-1970 or at