Since 1994, I’ve been running my own small business (it’s a consulting firm that helps clients with customer relationship management). In the early years, the best way to get information was by reading a few self-help business books and visiting a couple of Web sites once in a while. Now it seems as if there are a million Web sites and books and experts all trying to tell me how to succeed. And another million bloggers and pundits interpreting the daily political, economic and cultural news and events that affect my company.

What small-business owner has the time to sort through all of this stuff? Well, now that The New York Times has enlisted me as a blogger, I guess I do. I’m going spend the time each week and summarize everything that’s happening that affects my business. I’m going to highlight the best commentary from smart people who will help me understand these events. I’ll add a few of my own comments. This exercise, I hope, will help me run my business better. Perhaps it will help yours, too.

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According to The National Federation of Independent Business [NFIB] Education Foundation, over the lifetime of any small business, 30 percent will lose money, 30 percent will break even, and just fewer than 40 percent will be profitable. The Small Business Administration [SBA] reports that 50 percent of all small business fail after their first year, 33 percent fail after two years, and nearly 60 percent fail after four years. Reasons for failure cited by the SBA include: limited vision, over expansion, poor capital structure, over spending, lack of reserve funds or too little Free Cash Flow, failure to adjust to market changes, underestimating competition, poor business execution, poor business location, failure to establish company goals, poor market segmentation and strategy, poor knowledge of the competition, no management systems, over dependence on specific individuals, and/or focusing on the technical aspects more than the strategic aspects of the business, and an inadequate business plan.

Developing and growing a small business enterprise, either from a new venture or as an existing one, is difficult in a bull market, where the economy is growing. The difficulty factor is there none the less. However, in a down economy, in a recession, where the risk of business failure is magnified several times, the difficulty factor is increased by a significant magnitude. Entrepreneurs and small business enterprises find themselves working in their business as opposed to working on their business. That is, when times are tough, the small business owner feels compelled to spend all his or her time on operations just trying to keep the boat afloat, while putting off where the boat may be going. It is particularly critical in a recessionary economic cycle to spend as much time as possible on the direction of your boat, as it is on operations. If the vision is lost or clouded, it won’t really matter how hard you try to keep things afloat, at some point you may well run aground because you were not watching where you were going. Having an extra pair of eyes to help stir your ship and keep you in the right direction is critical to not only maintaining your business, but helping you to grow it. And as the principal in your small business, this is where you want to position yourself; at the helm stirring your enterprise in the direction of your vision.

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Can you believe that 50% of first year businesses do not make it to the next year? Did you know that 95% of businesses fail within 5 years of being established? It is because of these percentages that lenders and other financial organizations consider many small businesses to be ‘high risk’.

High risk businesses (and even some non-risk businesses) have an extremely difficult time finding and obtaining business credit. So, why are lenders so afraid to lend out funding to start-up and current businesses?

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