What's your ease of doing business index?
May 20, 2009
Survey Results for 05/20/2009:
The thing that makes it most difficult for my company to operate is:
Dealing with codes, permits, etc.
Start-up or expansion costs
Last week, I asked you to weigh in on some of the most difficult hurdles you have to jump to run a profitable business in this industry. More than 75 percent of respondents fell into the top three buckets of employing workers, dealing with the red tape of permits and codes, and paying taxes. I would have thought that obtaining credit might have ranked a little higher given the economic environment and the feedback I've received from many folks in the industry this year, but still, a solid 11 percent indicate that getting their hands on money is their most difficult challenge in running a business.
Check out this commentary from Forbes magazine, written by Alan Reynolds, senior fellow with the Cato Institute. He makes some excellent points about Keynsian Economics (the subject of my high school thesis, I'll have you know), and the reasons why we need to give manufacturers an incentive to produce. The key to solving this economic crisis may not be in inticing consumers to spend, but in nudging manufacturers to produce by allowing them a reasonable profit margin, he says.
"Profits do not simply depend on sales volume, as commonly believed, but also on the critical relationship Keynes emphasized between marginal costs and prices. If General Motors is losing $2,000 on every small car it sells, it won't help to sell more small cars. Car companies and home builders could sell many more cars and homes if they'd cut prices by 25%, but they'd go broke in the process."
Take a peek at the Forbes column if you get a chance and let me know what you think. I think it's a whole other part of the equation that we, as a society, tend to overlook but that we, as an industry, sure grapple with. How would your business be different if some of the hurdles listed above were, at the very least, lowered?