Small business owners are both optimistic and uncertain, the NFIB Optimism index rising for a fourth straight month to its highest level since February of twenty twenty two. At the same time, the Uncertainty intex index also continues to climb. Let's get a read on how business owners feel across the country. Joining us now is Barbara Corkoran, the founder of the Corcoran Group and of course executive producer of Shark Tank. Barbara Great having on the program, Thanks so much for joining us.
I want to ask you, thank you very much.
I want to ask you about your advice to small business owners. They come to you time and again for help and growing their businesses. And we're at a time right now where it looks like the economy is growing, but the US consumer is pulling back. What are you telling these business owners.
I'm telling them that someone has to get more of a fair share of the market than the next guy, and fear stands in the way, Loneliness stands in the way, and.
It it erodes people's confidence. This always business to be had, Why s you have it?
So I'm getting them to be more aggressive and more confident in reaching out, and.
Of course Barbara on Bloomberg. We talk about the FED all the time. We talk about high interest rates all the time. Matt has made the point just this morning that even if the FED cut rates in September, that's going to work with a lag. You're not going to feel that immediately in the economy. What is the on the ground view, the on the ground perspective that you're hearing about how high interest rates are filtering through down to small business owners.
Over the last six months, it's been nothing but a series of complaints. I almost put my phone on mute when I get a call from someone. But in the last month, I would say, once people have passed the fear, people are feeling more optimistic. My very tiny entrepreneurs have just started within the last year a feeling more optimistic because they're greatly affected by business loans and they're expecting rates to come down somewhat, so they're feeling more optimism.
I would say overall across the board.
When you think across the board as well, and you think but the cost that business owners are still struggling with, it's everything from real estate costs. As you know very very well this industry. It's also still wondering about where labor goes from here, What are the biggest challenges you're seeing that they have, and who do you think comes in to fix it?
The only one who could fix the business as the entrepreneur themselves. That's why our webinar series sponsored by AT and T Business is so valuable because we give a lot of practical answers and examples and into a lot of people who are doing it right. Really, the only thing that gets in the way of a business moving forward is really thinking that it's a time to be afraid. But what I have learned in business, every time I moved my own business ahead, it was in the worst
of times that everybody was an aasayer. Because when those times hit, everybody's laying low and everybody's afraid to move ahead.
And that's when you can actually.
Grab the basis of customers from your main competition if you care to, because this great opportunity all around that you could take advantage of.
We talk about interest rates now as if they are sky high, and we've never seen anything like this. You know, seven percent mortgage rates. You crazy became famous, made your fortune, started your career in real estate at the time when rates could.
Get much higher.
What do you tell people who are worried about you know, rates at this level, you know, paralyzing transactions.
It's really a waste of time to spend a minute worrying about it. The only thing that counts in growing up business is what can you do about it? And certainly you have no control over the rates. But I do remember when interest rates were eighteen percent and everybody was afraid of buying, except the super rich, because they had the capital behind them to go out there and pay all cash for anything they wanted.
They took advantage.
You got thirty percent discounts on the market rate of a year before the price rate of a year before. I tell people that whenever there's a change in the in the making a business and everybody's afraid, just have to look around and see where you could take advantage of,
where you could go in and scoop something out. At that time, when interest rates were eighteen percent, I remember making the actual decision in one day to switch my business halfway out of sales and go into rentals to move with the market.
But it's funny how not even.
Funny, but it's sad how entrepreneurs get stuck with their old reality of what they specialized and.
What they're good at. I learned. I learned the rental market right away because I had to. There were no sales.
Well, to use a personal example when it comes to real estate, I tried to buy a house an apartment, and the interestrars are just too high. And my bet there was, Okay, I'll just wait a couple of years, sign another multi year lease and then hope on the other side that rates will be lower. How much pent up demand do you think is on the other side of lower mortgage rates from here?
Tremendous demand because there are so many people thinking exactly as you are. And if you would take my advice, I would say get out there because what you have right now, which you won't have if rates come.
Down another point.
They just came down, but you need one more point to bring everybody out into the market.
And what's going to happen is you're going to pay more for the house.
So what have you really gained by paying the landlord over these years and taken the increases in rent?
Not much because price have gone up.
But wait, do you see what happens with prices when interest rates come down another percentage point.
Well to that end also, right, you know, interest rates go down, prices go up, And at the end of the day, how much, Barbara, do you worry about housing affordability in this country.
I worry about it all the time on two fronts. Rents keep going up anywhere in the United States, and that's a real concern because people can afford the rents based on their income. And I also worry much more so about people getting their piece of the American dream buying their first house, because the first house market, the story house market, is the hardest hit where the greatest bidding is going on. I even I had the daughter or a friend of mine tell me that last week
she was competing again. Are two best friends in the New York market. It's crazy and she's going to have to invite them for dinner parties after. So it's this so much competitive bidding, so much going over the price, and so much fear going around because people feel like can't get a head no starter. Prices are a real problem in America and they're going up everywhere.
Barbara.
I want to get back to the small businesses you're helping out, you're working with at and t business talking about technology driven solutions. That immediately makes me think of AI, artificial intelligence, and I wonder, you know, given that you've seen the real estate market and business move through the Internet age, what's your take on this new, uh, you know, supposedly revolutionary technology.
Well, it's a very good parallel you draw because I remember the days when I went on the Internet, and I was the first, over two years before my competitors went on, and what an advantage it was.
But I had one magic thing. I wasn't afraid.
What's stopping people using AI? And with so much chatters or around it, I'm sure you've sensed it is that people are afraid of it. But it's really like a muscle that you have to use and exercise. And it doesn't even take as much muscle as getting into the Internet took, which was rather complicated for a lot of small businesses. All you have to do is schedule ten minutes a day and just fool around with it and you start to learn, excuse me, AI and how you
can use in your business. It's the single best thing that has affected small business and that's why we made it a topic of our third at and T seminar because people need to know how they could use a pardon me a one to save costs of hiring people that they get for free now by using AI, they used to have to contend with the payroll.
Who do I hire? AI does all the.
Grudge work today for every small business I'm going to change your attitude or AI.
Well, I want to talk about the attitude a little bit more before we let you go, because we're talking about fear among small business owners. There's a lot of ways to get scared about AI. When you think about robots replacing all of our I mean, how do you get past that fear and actually change the attitude?
Well, I have to say people who get past the fear are not the people who are employed, but the people who should have no fear other people who employ them. Because before you do that next hire that you think you have a need for someone, you try AI. They will answer your needs. So there's really a no fear or shouldn't be fear on the part of the business owner. All right, Barbara, So don't forget the seminar you could find on eight A eight Barbara dot com.
I have to get that in sponsored by AT and T business.
I respect it. You got that plug in. Barbara really enjoyed this conversation. Hope to have you back soon. That, of course, is Barbara Corcoran.