Business experts eye what’s in store for 2014

National and global economies will continue to improve in 2014, but locally it will be a year when small businesses will come together to bring about change in Illinois’ business climate.

That was the consensus of a group of economic and financial experts Thursday at the Daily Herald Business Ledger’s Newsmakers Forum: Business Outlook 2014, held at the Meridian Banquet and Conference Center in Rolling Meadows.

Overall, the economy is still recovering from the Great Recession in 2008, said Thomas Rowen, vice president of Fifth Third Bank in Chicago, but the recovery is in line with historic economic cycles. The recovery period from significant downturns like the Great Depression of the 1930s averaged six to seven years, he said, and 2014 will put the country in the fifth year of recovery.

“We are on track with a normal recovery,” Rowen said. “This was a deep recession, but we are improving.”

Rowen said stabilizing energy prices, an improved housing market and stronger global economies could help push U.S. growth by about 2.5 percent next year. However, he noted uncertainty in the Federal Reserve’s policies and the continued impasse in budget and debt issues in Washington could cool that growth.

This past quarter, the federal debt and budget issues “have been a drag on the economy, but the economy keeps recovering,” Rowen said.

Closer to home, Illinois regulations have made it tougher for small business owners to operate, said Elliot Richardson, founder and CEO of the Small Business Advocacy Council in Chicago. He foresees 2014 as a time when small business owners will unite to bring about change in state economic policy, which has hampered that group with issues ranging from high fees for LLC companies to corporate taxes,

“There needs to be a discussion about Illinois economic development and what is good economic development,” Richardson said. “Is it just giving money to companies who threaten to leave, or is it investing money in education or in job retraining?”

He pointed out that small business organizations have been effective in bringing changes, such as the recent creation of a health insurance co-op, and that unified effort needs to continue.

“The only way to get things done is through critical mass,” he said.

The coming year promises to be a good one for those wanting to sell a business, said Eric Lundstrom, president and founder of Focus Capital Advisors of Downers Grove. Lundstrom said 2014 will be a sellers market in mergers and acquisitions as there are billions of dollars in investment money out there looking for the right companies. As a result, he said, we could see a resurgence in M&As similar to the period from 2006 to 2007.

“To get the next deal financed, you could have a roomful of bankers that want to make the deal because people are sitting on lots of money, and you can’t make money if you’re not loaning it out,” Lundstrom said.

Entrepreneurial businesses of less than $50 million are prime candidates, he said, and industries that will be in high demand include health care, manufacturing, construction products and information technology.

But as businesses grow, a “war on talent” will resume in 2014, said Bernie Lietz, COO of Corbett, Duncan and Hubly PC in Itasca, Employers will face challenges keeping talented employees if they are not moving from a “work/life balance” to “work/life blending” environment. Wireless technology has changed how employees are able to work, he said, and employers should focus on what results you expect from employees and how you are going to measure them, instead of requiring employees to work certain hours or be in the office at all times.

“Face time does not get results,” Lietz said. By setting clear expectations and goals for employees, “companies are seeing more engagement, better productivity out of their people, people are actually working harder, and they’re getting better results, and that’s because they’re being treated like grown-ups.”

A second Newsmakers Forum: Business Outlook 2014 is scheduled for Dec. 5 at Moraine Valley Community College in Palos Hills.

Presenting sponsors of the event were Corbett, Duncan & Hubly PC. Fifth Third Bank and Focus Capital Advisors. American Slide Chart/Perrygraf was a corporate sponsor.