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Big Events 2008
1) US Economy Falters and Then Falls
- Though the signs first started appearing for many small businesses last year, 2008 was the year when the economy’s struggles really came to the forefront. Home based businesses in particular were hit by slower hiring of freelancers and contractors and delayed spending on projects.
2) Credit Crunch
· As institutions started to fall, banks tightened up their lending. They tightened up so far, that the government had to step in with millions of dollars to try and get the flow going again. That meant the home office users who might have been able to upgrade equipment under a zero percent interest plan just a year or two ago found themselves unable to get credit at all, let alone with a decent rate.
3) Sub-Prime Mortgage Mess
· Though very related to the first two items on our list, the subprime mortgage debacle was the first step and it was seemingly the only problem during the first part of the year. Still, that problem was real enough as self-employed individuals came to find out that their avenue for getting or refinancing mortgages via stated income loans had been poisoned by unscrupulous lenders, borrowers, and mortgage brokers who used these loans to cheat underwriting criteria by pretending the borrowers had better situations than they actually did. Now, getting a mortgage for a small business owner is nearly impossible unless you have high earnings to show on your taxes.
4) US Presidential Election
· For the first time in 8 years, small business will be operating under a new president. While Congressional elections shook up the legislative branch as well, the overall party makeup remains the same.
5) Health Care Reform Discussion Heats Up
· Ask small business owners what their number one problem is compared to being employed, and many of them will answer health insurance. With private insurance almost always substantially more expensive than group insurance available through an employer, the premiums can be tough, especially for single employee small businesses run from a home office. Add to that the fact that most private insurance will not cover the cost of pregnancy or delivery, and this issue is extremely tough on younger small business owners who might be ready to start a family.
6) Free WiFi Service Explodes
· Many home office bound workers and business owners found themselves free from being bound non-stop to the home office. Thanks to the dropping cost of supplying WiFi to customers, virtually every coffee store, and every bookstore, plus dozens of other businesses now provide free wireless Internet access to their patrons. So, the local sandwich shop can be just as good of a place to get business done as the home.
· A story that ramped up during the year was the increasing number of layoffs finally culminating with news in December that the unemployment rate was the highest in over 20 years and more layoffs are coming. The bad news for home office users is that with fewer bodies to provide “coverage," working from home may no longer be an option for some. For entrepreneurs, the news means fewer opportunities because companies laying off workers aren’t often hiring outsiders either.
8) Stock Market Plummets
· While the markets don’t necessarily affect the home office worker or business owner immediately, the impact on assets inside of IRAs or other retirement plans can be enormous. This doesn’t make it any easier to get a loan when the assets side of the balance sheet looks worse (see Credit Crunch above).
There you have it. The Biggest News Stories for Home Office Based Small Business in 2008.
Have another one? Drop a comment or shoot me an email.