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Getting the Money As small business owners tried to build and expand over the past few years, they've been butting their heads against a significant wall: a reluctance to lend by banks. Is there any relief on the horizon? The coming year may bring welcome relief. "Bank profits and equity have improved over the past year and they are reaching desired levels," says Walter Simson, principal of Chatham, New Jersey-based Ventor Consulting (ventorllc.com). "So banks are going to be looking to make more loans rather than spending all their efforts recovering previous ones." "Maybe lending won't be as strong as it was in 2006 and 2007— we don't want to go overboard," adds Simson. "But we do want ample availability of credit. Today bank rates are good and the conditions for lending—covenants and contract restrictions—are reasonable." should encourage that spending. "Interest rates have fallen in the wake of the Federal Reserve's decision not to taper asset purchases," says Koropeckyj. UNCERTAINTY RULES So why haven't businesses already been investing all their accumulated capital? The culprit: uncertainty. Business leaders are not sure about the future. They do not have a firm grip on what will happen with federal legislation or about the future health of the economy. That same uncertainty seems to feed into the sluggish state of what manufacturers call "backlog," or sales placed for future delivery. "Manufacturers keep telling me 'My sales are pretty strong but my backlog is much weaker,'" says Michael Smeltzer, director of the Manufacturers Association of South Central Pennsylvania, a trade group whose members employ some 200,000 workers (mascpa. org). "This has been going on for three years. Profit margins are okay but backlogs are not strong enough to encourage manufacturers to make decisions." Hence the hesitation to spend accumulated corporate cash. And what's causing the sluggish backlog? The same uncertainty about the future—this time in the minds of manufacturers' customers. "Customers are putting off investment decisions until the very last moment," says Smeltzer. "A customer will make a call and say, 'I need five widgets and I need them tomorrow.' Five years ago he would have called six months in advance." Absent a robust backlog, manufacturers tend to put off investing their hard-earned cash. The result is a sluggish selling environment that ricochets through the economy—all the way to the retailer's cash register. REBUILD AND GROW So how can the smart retailer move into a profitable 2014? "This will be the year for good, strong inventory management, good merchandising and sensible promotions," Simson says. "Do what you can to get the customer in the door. And make sure you have the personnel to handle the consumer." Some retailers, says Simson, have gone overboard in reducing labor costs. "People complain about having no one to help them. That's especially true with big-box stores." As for making the right decisions to thrive in the year ahead, Simson suggests working your plan and keeping the faith. "There's no seat belt to strap on," says Simson. "If we take our individual growth and expansion projects one at a time and put them in place thoughtfully, good things will come." ■ Phillip M. Perry is a New York City-based freelance writer. VISIT US AT BOOTH #928 | WBC, BALLY'S HOTEL & CASINO, LAS VEGAS J AN UA RY 1 6-1 7, 2 0 14 Altima Plus Magna Plus Orders: 800 627 5839 42 January 2014 | beautystorebusiness.com salonproducts@americandawn.com