JAN. 2013 LCT EDITOR’S COLUMN: A New Year is considered prime time to be optimistic and sell some hope, as the saying goes. I’ll admit, it’s tougher to do that going into 2013 with all the hysterical talk of fiscal cliffs and an election outcome that disappointed most of the small business sector. But what choice do you really have? Pessimism gets you nowhere.
Even if the business sector’s preferred candidate had won the Presidential election, there would still be the prospect of a fiscal cliff and very likely a U.S. Congress split between the two political parties. Some form of the 2/3-/1/3 governing divide among Democrats and Republicans would have been preserved regardless of the election’s outcome, and hence all the political gridlock.
Thankfully, life has a way of going on, with lots of work to do, business to be had, and money to be made. Despite the constant talk of fiscal cliffs and debt ceiling debates, my sense is that after the Y2K hysteria of 1999, the disputed election of 2000, the terrorist attacks of Sept. 11, 2001, Hurricanes Katrina and Sandy, high gas prices, the financial meltdown of 2008, and the Deepwater Horizon oil spill, America would be tough enough to get up and walk away after a fall off the cliff.
America is all about resilience. We’ll all survive and live to work another day.
The business press is full of fearful reports about American businesses facing uncertainty and political drama in Washington, D.C. We should remember that on-the-ground, daily circumstances for businesses and industries can vary, not only from state to state but niche to niche.
What I got from speaking to limousine operators in December is that business has been getting better, and while it will continue to do so, no one expects a big bounce back from the steep drop-off four years ago. They plan to spend on what they need, which means vehicles, but may postpone a few extras. In other words, it’ll be slow and steady growth.
Operator Brett Barenholtz of Boston Car Service, a 16-vehicle operation, has noticed more corporate demand for attorneys. “It’s getting incredibly busy on the corporate front, and that only means more deals will be happening,” he said. “That’s why they need more lawyers.” Meanwhile, real estate values in Boston and in Massachusetts are rising, giving people more confidence to spend money as they see rising equity in their homes, he reports.
Not knowing how much taxes and business costs will rise is actually worse than knowing and accepting how much they will rise. “If you knew just what you were going to pay next year, you can figure out the best route. Right now, you have no idea. It’s just challenging. But it’s not as if we’re going to shrink,” says Barenholtz, who just added some BMW 535i GTs and Cadillac Escalades to his fleet. “We will still try to grow.”
Another reason for optimism: Barenholtz reports that a longtime corporate client who avoided stretch limousines recently signed on to rent one every Saturday night to relax and not have to drive anymore.
At Fleet Transportation in Alexandria, Va., a 22-vehicle operation serving Washington, D.C., owner and vice president Stacey Glazier says she and her husband and business partner David are concerned about the effects of a second Obama term on small businesses. They wonder about the future lending environment and access to getting support from the Small Business Administration. The company is putting on hold capital and infrastructure spending other than finishing a new software installation and recently adding three vehicles.
But the good news for Fleet Transportation is it grew 13% in revenues from 2011 to 2012, which means it is still hiring and expects continued growth in 2013. And the Presidential Inauguration is always a boon to revenues for D.C.-area companies, regardless of which candidate gets sworn in. “Going into the New Year we are busy and have been growing each year with no major setbacks for the past five years,” Glazier says.
Operator Michael Campbell, who owns Grace Limousine of Manchester, N.H., and serves as a board director of the National Limousine Association, says a lot of doom and gloom talk has been too dramatic. Businesses can still do plenty to move forward, he says. “Economically, the Obama years have been good to our business. We’ve seen 20%-25% growth every year for the last four years.”
Much of that, he says, stems from hard work, instead of the slow recovery: Ramping up sales, opening a satellite office, and growing the affiliate network. “This has never really been an easy business to be in with all the cheap competition,” Campbell says.
“But there always have been people who want the highest quality product in the market. I’m optimistic because people have kept on buying and the customer base has been resilient. . . In spite of the regulatory conditions and issues, we’re focused on providing a good solid product day in and day out.”
So here’s my wish for the New Year: The business sector outsmarts and out-adjusts the politicians, leaving them more irrelevant and retro-looking four years from now. I liked Atlanta operator Danny Bacher’s Facebook post on Nov. 7: “Forget politics. A good businessman can be successful in any environment.” That will be put to the test as never before.