It's All in Your Head Feeling optimistic or pessimistic about the state of the economy? Uncertain times like these can really mess with your mind. Here's what other BIZ Experiencess are doing to keep it together--and keep moving ahead.

It's surreal-and exhausting-to ponder how much our country has been through over the past five years. The dotcom boom. The controversial 2000 presidential election. The dotcom bust. 9/11. Enron. Iraq. Janet's "wardrobe malfunction." The list goes on.

These strange times can mess with an BIZ Experiences's head. As we hit the midpoint of the first decade of the new millennium, chances are you're either feeling exceedingly optimistic or somewhat pessimistic about how things are going.

There are plenty of people on both sides of the fence. Economic pessimists point to disappointing job-growth figures, an increasing number of bankruptcies, shaky consumer confidence and anemic investment as indications that the times are bad and getting worse. As of September, 724,320 job cuts had been announced-higher than every year-end total prior to 2001, according to Chicago-based global outplacement firm Challenger, Gray & Christmas Inc. The Economic Cycle Research Institute, an independent forecasting group in New York City that releases a weekly report gauging growth in the overall economy, concluded economic growth fell to an 81-week low this past October as mortgage applications slowed and more people filed initial jobless claims.

"I have never been so pessimistic in making any [economic] forecast since 1981-82," says Robert H. Parks, economist and professor of finance at Pace University in New York City, and author of Unlocking the Secrets of Wall Street. Parks doesn't see evidence of a sustained economic recovery. Instead, he sees the specter of rampant asset inflation concerning housing and stocks, skyrocketing deficits, and a war with no end in sight. "The biggest single problem of the business community [in 2005] will be uncertainty," he says. "Trying to make a small business blossom over the next 18 months is going to be a very rough job."

Economic optimists, on the other hand, point to 11 straight quarters of economic growth, low inflation and interest rates that remain at historic lows as signs that the times are good and getting better. So while the job market may not be growing as quickly as expected, it is still growing.

SurePayroll-a Skokie, Illinois-based national provider of payroll services exclusively for small businesses-collects hiring and wage data from its 13,000 clients, and estimates that although the average small-business paycheck has dropped 3.3 percent year-to-date, the average head count grew from 5.5 to 5.6 employees between the second and third quarters of 2004. "Hiring has increased at small businesses across the country," says Michael Alter, president of SurePayroll, "which bodes well for saying the economy is recovering."

Glass Half-Full or Half-Empty?

BIZ Experiencess form their worldviews not from surveys, but fromwhat they see happening around them. For Nate McKelvey, it'sbeen a wild ride since he started Quincy, Massachusetts-basedonline luxury jet charter company CharterAuction.com in 1999. McKelvey, 35, hit the tailend of the VC boom and bootstrapped the company for most of 2000.At the same time, a now-defunct competitor received $35 million inventure backing. "I was thinking I had a horrible idea at theabsolute wrong time," he says.

But 9/11 spurred a flurry of bookings that helpedCharterAuction.com close 2001 with sales of $1.2 million. Today,the 25-employee company books luxury jets for highfliers rangingfrom Wall Street executives and celebrities to political bigwigsincluding Bill Clinton and Rudolph Giuliani.

McKelvey describes CharterAuction.com as a survivor that'smade every penny count. He's encouraged by the company'sinternational business, which has increased from 8 to 15 percent ofthe company's total business over the past two years.CharterAuction.com projects sales of more than $15 million in 2004and hopes to maintain 60 percent annual growth in 2005. Even VCsare leaving voice mails, a sign things have come full circle.

Life isn't worry free, however: Rising oil prices and widefluctuations in the stock market have required CharterAuction.comto adjust its marketing strategy to promote aircraft availabilityover price. "From my perspective, [the glass] is more thanthree-quarters full," McKelvey says. "For people whostuck it out, the nuclear winter is over."

Still, BIZ Experiencess can feel weighed down by all theinstability at home and abroad. Melissa Wayne is co-founder of3 Oh! 5 CreativeInc., a 9-year-old post-production company in North Hollywood,California, that produces movie trailers, TV spots, broadcastmarketing pieces and bonus features for DVDs. Business boomed after9/11 as people sought escape through movie rentals, but Wayne, 53,can't escape reality. She is troubled by issues ranging fromthe war in Iraq and the soaring national debt to the way othercountries view the United States.

"There are so many changes going on. It's going to be arocky road for quite a while," she says. "My reactionafter 9/11 was that the world as we know it is over." Runninga small company that can adapt quickly to market changes givesWayne some confidence about the new millennium, but she'sstaving off major capital improvements and won't expand herstaff of 40 until things seem more stable.

The U.S. economy is back to where it was in the early 1990s whenthe worst of the recession was over, but we're lacking theinnovation and optimism of that time period, says Maria Minniti,associate professor of Economics at Babson College in Babson Park,Massachusetts. She sees 2005 as a crucial year for decisions thatwill have long-term impact on the economy. Uncertainty "is nota positive thing," she says. "There's a fork in theroad."

How good BIZ Experiencess feel depends on where they're based,says Brenda Nashawaty, 50, principal of CHEN PR Inc., a20-employee technology PR firm in Waltham, Massachusetts, whoseclients include Sun Microsystems and Fairchild Semiconductor."I think the sense of recovery is about six months ahead onthe West Coast," she says. "We've just started tofeel things are turning around in the past couple ofmonths."

Nashawaty and three PR colleagues started CHEN PR (an acronymcreated from the first letters of their last names) in 1996 androde New England's dotcom wave. When the high-tech sectorstarted to crumble in 2000, though, they stopped replacingemployees who left the company, and growth stayed flat until 2003.Nashawaty thinks the downturn of the early 2000s was much worsethan the slump of the early 1990s. This time, "it wasbigger," she says. "There were more people in thebusiness who lost their jobs, [and] in all businesses, not justours."

Nashawaty is cautiously optimistic about the future. On onehand, CHEN PR is branching into PR services for biotech andsecurity firms, and it's seen a healthy uptick in companysales, which surpass $1 million per year. On the other hand, shesees businesspeople becoming too cautious. She thinks it will takeanother year before the economy is healthy. Until then, shebelieves, it's important to look on the bright side and forgeahead conservatively. "It's corny, but we Americans plowthrough. We get through bad times," she says. "Everyone[in business] feels like it's going to get better if we juststick to what we're doing."

The Surreal Life

Some BIZ Experiencess are glad the overheated dotcom era is adistant memory. "A lot of people who didn't know what theywere doing jumped in because they [thought they] could wing it, and[they] ticked off a lot of consumers," says Scott Siegel,co-founder and CEO of 6-year-old Sunrise Financial Inc., a mortgagebroker in Chicago with 29 employees.

Sunrise's sales doubled every year during the first fouryears as the company rode the refinancing boom. Now the re-fi erahas ended, and interest rates are rising; but Siegel, 38, remainsoptimistic. An industry shakeout is underway, leaving the companywith fewer competitors. While housing prices could fall, Siegelbelieves the housing market will stay fundamentally strong thisyear. He stays focused on the day-to-day business instead of smallmovements in interest rates or political infighting in Washington."I don't think it matters politically what's goingon," Siegel says. "With their homes, people arefunctioning at more of a local level. It's very myopic."The company plans to double in size over the next few years throughstrategic alliances with other lenders. Sales hit $1.8 million in2004, and Siegel hopes to hire at least five new employees in2005.

BIZ Experiencess don't care as much about the big picture asthey care about their particular sector, says Donald Mazzella,editor of Small Business Digest, an online publicationbased in Palisades Park, New Jersey. It polled more than 5,000small-business owners last year and found 62 percent expected toexceed goals. When it comes to their own businesses, BIZ Experiencess"are pretty positive about things," Mazzella says."Certainly in those areas they can control, they're verypositive."

Kimberly Gyuran is president of The PayrollCompany, an 11-employee payroll firm based in Las Vegas.Friends and family advised her it wasn't the right time tostart a business, but Gyuran took out a loan against her 401(k) andput up her house for collateral for an SBA loan to start thecompany in November 2000.

Less than a year later, 9/11 happened. The company stayed afloatby offering free payroll services, such as cutting checks andsetting up direct deposit accounts for customers, who in turnreferred new clients. "It just snowballed," says Gyuran,39. Helping clients navigate changes in federal employment laws hasspurred business in recent months: Today, the company has more than600 clients and sales approaching $1 million. In December, thecompany upgraded to a new 2,600-square-foot space.

Gyuran feels reality has met her expectations, but she tends toavoid "energy stealers" like TV news and newspapers. Whenshe feels down, she meditates. "I can't live infear," she says. "If I spent all my time worrying, Iwouldn't have time to grow the business."

For BIZ Experiencess, staying optimistic means maintainingconfidence in their products or services. The state of the economyalways plays second fiddle to a really good idea, says DougBrenhouse, co-founder of MetaCarta Inc., a 4-year-old Cambridge, Massachusetts,software firm whose search engine software is used by clientsincluding the Air Force, Chevron and the Department of Defense.

Brenhouse, 31, spent the first half of 2001 looking for fundingand received a grant through the Department of Defense in mid-2001.The war in Iraq has increased demand for software tools that makeit easier to access specific information; MetaCarta's staffdoubled in 2003 and 2004. "Customers are buying more,"says Brenhouse, whose company's sales are less than $10 milliona year.

Brenhouse believes the dotcom era taught everyone a goodbusiness lesson. He sees the software industry coming back as morecompanies with good value propositions get funded. But establishedcompanies are still shedding overcapacity, and he knowsentrepreneurs who have serious doubts about the economy. "Someare really excited about what they're doing and how things areworking out for their companies," Brenhouse says. "Someare saying, 'Wow. This is terrible. I can't wait forsomething else to happen.'"

He'd like to think the hardest times are behind us, butbeing an BIZ Experiences requires making hard decisions and takingcalculated risks every day, no matter what's going on "outthere." His motto? Whether you think you can or you think youcan't, it's true. "If I really were pessimistic aboutthe state of the world, our business probably wouldn't be doingas well," he says. "[The economy] can only get betterthis time around." If 2005 is as volatile as the past fouryears, BIZ Experiencess will need all the confidence they can get.