Remember the opening scene from Twilight Zone: The Movie with Dan Aykroyd?  He plays a hitchhiker riding in the passenger seat of a car on a dark, deserted highway.  He repeatedly asks the driver if he wants to see something “really scary.”  He tells the driver that if he wants to see it, he has to pull over.  Finally, the driver pulls to the side of the road and says, “Okay, show me.”  The scary music starts.  Aykroyd turns his head away from the driver, then turns back around—but it’s no longer Aykroyd’s face.  It’s now the face of a horrifying, demonic creature who fatally attacks the poor driver and terrifies everyone watching.

Who is the menacing monster terrorizing small businesses?  

Welcome to the 2019 Nevada State Bank Small Business Survey.  If you want to see something really scary, open to the Outlook on page 5 and read the top 3 concerns of business owners.

What would you guess are the top 3 concerns?

Probably “cash flow,” right?  Small businesses are always short on cash flow, and it puts them out of business all the time.  You may be surprised to learn that, while cash flow is listed as a challenge, it wasn’t one of the top concerns.

Maybe it would be “finding new customers and business.”  While respondents said this was an important challenge, it still wasn’t on the list of concerns.

Oh, now you have it!  It must be “finding and retaining quality employees.”  That is always hard no matter what’s happening with the economy.  But while hiring and retaining quality employees is, in fact, THE top challenge among businesses right now, it still didn’t make it on the list of top 3 concerns.

Okay, enough beating around the bush.  Out of 400 Nevada businesses surveyed, here are their top 3 concerns:
#1 Healthcare (Obamacare)

#2 Government Regulation

#3 Business Taxes

What???  In case you hadn’t noticed, all 3 top concerns are government-related.  We worry more about what the government is going to do to us than we do about hiring and keeping employees, having positive cash flow, or finding new business.  That is scary, and if you don’t agree… you must work for the government!

Dan Aykroyd asking the driver if he wants to see something really scary—then killing him—reminds me of this trend of intrusive government regulation which is basically doing the same thing to small businesses.  It would be ridiculous to suggest that all small businesses will be shut down, but the government sure doesn’t make it easy to operate one profitably.

If you have read any of my previous articles, you know I have no love for the government, and I feel really sorry for the citizens of this great nation who do.  They have fallen into the trap of thinking that the government is the “ultimate solution” for all of our problems and woes.  This is hardly the case, and, in fact, the opposite has almost always proven to be true.

How many times have you heard our politicians say they are going to provide jobs for people?  It is not the government’s role to provide jobs or even to help with that part of the economy.  That is the role of business.  Government should just get out of the way.  Less money spent on government regulation means more money can be spent on expanding business, which always translates into jobs.

Whenever the government says it is here to help, it reminds me of a 5-year-old asking his parents if he can help them paint a room.  They don’t want to say “no,” because it’s cute and they don’t want to crush his little spirit, but they understand the consequences of letting the child help.  If they’re being honest, what they really should say is, “Oh, what a nice offer, but Mommy and Daddy just need to get it done, and we can’t have you slowing us down.”  The 5-year-old boy has no idea of the consequences of his actions and doesn’t care that Mom and Dad will have to clean up after him.

My kids enjoyed many carefree adventures when they were young, just like this camping trip circa 2004.  What a life!  But even at this young age, they were held accountable for a couple chores here and there.  Mommy and Daddy can’t do everything for you.  I would be very surprised if any of my 4 kids ever ended up in a cushy government job!

Wow!  After writing that last paragraph, it makes me wonder if I should become an elected official, or better yet, an appointed one.  Hmmmm… lots of power, no consequences or accountability, and everyone else has to clean up after me.  Ahhh… to be 5 years old again.

In the small business survey, the bank also asked business owners if they agreed with economists’ projections that a recession is coming in 2020.  Respondents were divided: about 43% said some form of “yes” and 40% said they didn’t think a recession was on the way.  Well folks, the “yeses” have it, because the recession is coming.  I’m not a doomsday guy—just a real estate investor who understands the nature of economic cycles.  We might not experience it in 2020, but a recession is on the way.  This isn’t a reason to panic, but it is an opportunity to get your finances and investments in order.

Earlier this year, we posted this article about how to make sure your investments are recession resistant.  We included a lot of easy-to-digest information that explains what happens during the economic cycle, how recessions are a necessary part of it, and what signs to look for along the way.

Understanding the need for recession-resistant assets, we have structured our investments to hold up well during a recession or downturn.  Of course, nothing is guaranteed, but we’ve done everything we can to ensure that #1: investor principal is protected and #2: investors continue to earn consistent returns, regardless of what the economy is up to.