The most important economic trend for small businesses

I now count 42 years of my life as a small business operator. The first one was a sweet corn farming operated conducted separately from my family and neighbors at age 17. Since then, I’ve had quite a range of small business experiences from an internet based technology company to soft shell crabs. That range of time and experience gives me some ability to look at the trends. The one overriding small business trend that I see over my lifetime is this:

The amount spent on productivity-related items has decreased while the amount spent on government-related items has increased.

I suspect this is a widespread trend but I also suspect that I’ve experienced it more than most and that’s why I’m writing about it. I’m not aware of much research in this area. I think that if I were to conduct organized research on a small business topic, this would be it.

By “amount” I mean the actual nominal dollar amount and the portion of gross income.

By “productivity-related”, I mean things like office rents, staff, software, hardware, training, tools and equipment.

By “government-related”, I mean things like taxes, permits, licenses, fines, legal fees and insurance (especially health insurance).

It is easy to conclude that this is not a healthy trend for small businesses.

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