A recent Gallup survey seems to indicate small business owners aren’t worried about access to credit, rather revenues and sales are their primary concern.
This led one of our favorite small business experts to declare that the data should “get the [credit crisis] monkey off business lenders’ backs once and for all.”
To me, this is a classic example of making data say what you want it to.
It reminds me of O.J. Simpson.
Asking the wrong question
During the infamous O.J. trial, the Prosecution argued that O.J. Simpson had a pattern of spousal abuse and therefore likely killed his ex-wife.
Simpson’s attorney Alan Dershowitz countered that the Prosecution could prove that only 1 out of 2,500 men who abuse their spouses go on to murder them, and therefore it wasn’t likely that O.J. committed the crime.
The problem with this, and the same issues exist in interpreting the Gallup study, is that it is that it answers the wrong question.
The real question in the O.J. Simpson case should have been: What’s the probability that a man murdered his ex-wife, given that he previously abused her AND she was murdered by someone?
That probability is closer to 90%.
In Gallup’s case, if the study was designed to determine whether or not a credit crisis exists, the question shouldn’t have been: What are business owners mostly concerned about?
Isn’t every business owner’s main concern how to increase sales and revenues? It’s part of the job description.
The question should have been: Are business owners obtaining the credit they require?
To grow, business’s need access to credit
By stating that, as a result of this study, lender’s can now stop worrying about the credit crisis and their part in it, it’s ignoring that business capital and access to that capital is directly related to increasing sales and revenues.
Can a business grow without making changes? If a business produces X amount of widgets within a certain time period to meet its current demand, what has to happen to increase the demand and increase production to meet increased demand?
Does it somehow happen magically?
The business needs to focus efforts on advertising and sales. It needs to make its production more efficient. It may need to hire new sales reps or buy new equipment to increase production of widgets.
These changes require access to capital.
I imagine all of the 603 small business owners surveyed by Gallup consider this an integral part of growing their business.
Based on that, the survey tells me access to credit is the top concern of business owners.