Optimism Drops, Amazon Boycotts Hit Small Businesses, Botox Discrimination

Hey everybody, it's Gene Marks and welcome to this week's episode of the Paychex THRIVE Week in Review. This is where we take a few items from the news and talk about them a little bit because they impact your small business and mine. So, let's get to it.

The first big item in the news from this past week is small business optimism. The National Federation of Independent Businesses, they released their monthly Small Business Optimism Index, and it was not really great news.

Although the levels of small business optimism still remain at relatively historical high levels, unfortunately, it fell by 2.1 points during the month of February. It's the fourth consecutive month above the average, which is good news, however, the uncertainty index that's part of it also rose. It was the second-highest recorded reading of uncertainty in the NFIB's history, which is not great.

Bill Dunkleberg, who's the NFIB chief economist, said this. “Uncertainty is high and rising on Main Street and for many reasons. Those small business owners expecting better business conditions in the next six months dropped, and the percent viewing the current period as a good time to expand fell but remains well above where it was in the fall. Inflation remains a major problem, ranked second behind the top problem, which is labor quality.”

The bottom line is this, uncertainty is still high and optimism is also still very high from historical comparisons, but it's dropping. And what we have to keep an eye on as to whether or not it's going to continue to drop as more challenges lay ahead for small businesses dealing with a lot of the new administration's policies on tariffs, immigration, labor regulations, taxes, and all of that.

So, keeping an eye on small business optimism; Hey, it's only 33 million of us that make up half of the country's GDP and half of the country's employees.

So, when small businesses are optimistic, that's good news. When they're not optimistic, not good news. So, we will keep an eye on that level.

By the way, that NFIB Optimism Index. Of all the different surveys and indexes that I get to read, it's the one that I rely on the most. I like it. It's been around for many decades. It's reliable and it's well, well put together, well-researched. So, pay attention to it keep an eye on it. We'll see if it continues to drop or hopefully it stays steady in the months to come.

The next bit of news comes from a site called Modern Retail. Modern Retail was reporting on a recent boycott on Feb. 28 of Amazon. It was a consumer-led economic blackout that urged shoppers to boycott Amazon and other major retailers for 24 hours.

However, it did report on one small business owner who wrote in to say that, hey, listen, when you boycott an Amazon, for example, or a Target or any large retailers like that, please be aware that that boycott also impacts small businesses, as well. This was a reseller. He's an Amazon reseller. He's been selling products on Amazon since 2014. Sorry, it's a she. Lori Barzvi is her name. She wrote your boycott, which is meant to help small businesses, will actually hurt small businesses unless you educate your constituents on how to determine if what they are buying is from Amazon or is actually from a third-party small business seller.

Her message underscored a point that often gets overlooked. More than half of Amazon's sales come from independent third-party sellers, many of them small businesses. So, although while the boycott is sort of framing Amazon as the target, this small business owner wanted everyone to understand that a boycott would end up hurting small businesses more than the company itself.

So, bear in mind that when you do hear about boycotts or when you do hear any backlash against large companies or large companies struggling or laying people off. Let's just not forget that large companies employ lots of people who spend money at small businesses and many large companies like Amazon have channels and distribution arms that small businesses rely on to sell through. So, it's not just a big company thing but sometimes that impacts small businesses as well, and that's exactly what Lori Barzvi wanted to point out in her opposition to the Amazon.

Finally, and interestingly in the news, this is a report that comes from News Channel 9 in the U.S., but the actual story comes from the UK. A leading comedy club instituted a ban against customers – are you ready – with Botox, citing that they were getting complaints from comedians who said it was challenging to perform for reactionless faces.

The owner of the Top Secret Comedy Club in London. His name is Mark Rothman announced that audience members who have facial Botox would be turned away at the door, which he said was a decision made in order to keep attracting popular talent to the club.

How he actually makes that determination, I have no idea, but that is one small business that is practicing a little bit of discrimination. Now in his defense, he say, “Comedy thrives on connection and facial expressions play a huge part. We want people to laugh, cry, frown, sneer, but frozen faces from Botox impacts the entire atmosphere. We hope trialing this ban will help move the needle and get facial reactions back into the room for the benefit of our comedians and the office.”

It raises an interesting point for a lot of business owners that sometimes do take part in some forms of discrimination against customers. I'm thinking restaurants that don't like to allow parents with young children in or other businesses that don't like to have people dressed or appearing in some way like only where you know nobody will be served unless they're wearing a shirt or no sandals, no shoes, no service.

These are all different forms of discrimination against your customers. The big question is whether or not your business can afford to do that type of discrimination, let alone whether or not it's illegal. Well, if you're going discriminate against customers that have Botox and you're a comedy club, who knows what that opens the door to, we shall see.

You have been watching and listening to the Paychex THRIVE Week in Review and my name is Gene Marks. If you need any help or advice or tips in running your business, please join us and sign up for our Paychex THRIVE newsletter. Go to paychex.com/thrive.

Thanks for watching and listening. I will be back to you next week with a few items of news that impacts your business and some thoughts on it. Speak to you then. Take care.

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